Georgia Bad Faith Insurance Lawsuits

April 19, 2011

Most people in Georgia have several types of insurance coverage designed to protect against a variety of risks, including auto insurance to protect against liability for auto accidents; homeowners insurance to protect against losing one's home and contents and against claims by others for injuries suffered as a result of the insured's negligence; and uninsured motorist (UM) coverage to protect against the risk of being injured and suffering damage to one's vehicle when involved in a car crash with a driver with no insurance.

Insurance coverage is not cheap, and the premiums may easily reach into the tens of thousands of dollars with an insured faithfully making the premium payments for many years. When one makes their premium payments year after year, it is presumed that when a situation arrives where a claim must be made one's insurance company will be fair and live up to its contractual obligations. Unfortunately, the pressure to increase an insurance company's profit margin can result in an insurance company failing to provide the benefits for which their insured contracted and paid. At Montlick and Associates, Attorneys at Law, we have represented those throughout Georgia who are victims of bad faith denials of benefits or coverage by their insurance company for over 27 years.

An insurance company is required to pay a valid claim or defend against claims brought by others against their insured. Every contract between an insurance company and its insured includes an implied promise to act in good faith. In broad terms, bad faith by an insurance company involves delaying, withholding or denying benefits to which the insured is legitimately entitled under the policy. Where an insurance company refuses to pay or settle a valid claim or to defend its insured against claims by third parties, the insured may have a right to bring a lawsuit against one's insurance company for bad faith.

The recovery that is available in an insurance bad faith lawsuit depends on the type of coverage. The types of recovery available for different types of insurance coverage include the following:

  • First Party Coverage: First party insurance is intended to pay an insured for losses actually suffered by the insured. Bad faith for this type of claim is defined as a "frivolous and unfounded refusal to pay a claim." A person whose claim is denied in bad faith under this provision is entitled to receive up to 50% of the value of the claim or $5,000, whichever is greater, plus the value of the claim itself. If you prevail in bringing an insurance bad faith claim, you are also entitled to reasonable attorney's fees. There are very particular notice requirements so it is important to contact a Georgia insurance bad faith attorney if you are considering such a claim.
  • Uninsured Motorist (UM) Coverage: Uninsured motorist coverage provides compensation for damages if you are the victim of a hit and run car crash or are involved in an auto accident with an uninsured motorist. Insurance bad faith in this context means a frivolous and unfounded denial of liability for your claim. The recovery for insurance bad faith is similar to that available for first party bad faith except the maximum penalty is 25% instead of 50%. As with a first party insurance bad faith lawsuit, the court may award you reasonable attorney's fees.
  • Liability Insurance Claims: Liability insurance protects the insured against lawsuits by third parties resulting from the negligence of the insured. The bad faith conduct may include a refusal to defend against a claim or refusal to settle the claim within policy limits where the liability of the insured is clear and special damages may exceed the policy limits. Because this type of claim poses substantially more exposure to an insured, the standard for establishing bad faith is more lenient and recovery much greater. Bad faith in this context may be a dishonest purpose, implied conscious wrongdoing and even negligence to the degree that it constitutes a breach of a known duty. Because of the substantial exposure that may result for an insured with this type of coverage, the insurance company may be liable for any court judgment in excess of policy limits, reasonable attorney's fees and even punitive damages.

If you have faithfully paid your premiums, you have a right to expect your insurance company to live up to its contractual obligations if you need to make a claim. We have represented thousands of people throughout Georgia just like you, so call Montlick & Associates today to see how we can help. Our Georgia insurance bad faith attorneys are available to assist clients throughout all of Georgia, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state. Call us today for your free consultation at 1-800-LAW-NEED (1-800-529-6333), or visit us on the web at No matter where you are in Georgia, we are just a phone call away and we will even come to you.

Category: Personal Injury

Please Note:
Many of our blog articles discuss the law. All information provided about the law is very general in nature and should not be relied upon as legal advice. Every situation is different, and should be analyzed by a lawyer who can provide individualized advice based on the facts involved in your unique situation, and a consideration of all of the nuances of the statutes and case law that apply at the time.