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How Do You Know if Your Insurance Company Is Acting in Bad Faith in Georgia?


The vast majority of people and businesses in the United States are covered by some type of insurance, including but not limited to health insurance, auto insurance, homeowner’s insurance, business interruption insurance, and others.

Although your insurance company promised to protect you if you suffer covered damages or losses – after all, you are paying money for it – that is not always what happens when you file an insurance claim. If your insurer fails or refuses to pay your claim, you may be dealing with a potential case of insurance bad faith.

Types of Bad Faith Insurance Claims in Georgia

Georgia courts primarily recognize two types of bad faith insurance claims:

  1. A first-party insurance claim, which is when your insurance company fails to pay, investigate, or handle an insurance claim that you make for a loss you sustained; and
  2. A third-party insurance claim, which is when someone else files a claim against you and your insurance company fails to protect you from a liability claim.

If you purchased a policy and pay premiums, but your insurance company is acting in bad faith, do not hesitate to contact an experienced insurance litigation attorney in Atlanta.

Bad Faith Insurance Practices

The following actions may constitute bad faith insurance practices:

  • Refusing to pay a claim for a loss or damage that is covered under the insured’s policy
  • Intentionally providing incorrect advice to the policyholder
  • Delaying payment of a claim without a valid reason
  • Refusing to settle a claim for a legitimate reason
  • Failing to investigate an insurance claim in a timely manner
  • Undervaluing a claim without a reasonable basis
  • Withholding, misinterpreting, or misconstruing claims information
  • Refusing to protect the insured from a liability judgment

Under the O.C.G.A. § 33-4-6, an insurance company that acts in bad faith is liable to pay the policyholder, in addition to the loss itself, a penalty of 50% of the liability for the loss or $5,000, whichever amount is greater. Also, the insurance company must cover all reasonable attorney’s fees associated with an insurance bad faith claim.

Was Your Insurance Claim Denied in Bad Faith?

If your losses are covered under your insurance policy, but your insurance company denied or undervalued your claim, the insurer may be acting in bad faith. The following are tell-tale signs that your insurance claim was denied in bad faith:

  • Delayed response. Your insurance company must investigate and either approve or deny your insurance claim within a reasonable period of time. A delayed response could be a sign of bad faith practice.
  • Lack of an explanation. If your insurance claim was denied or undervalued without any explanation or without providing a valid reason, you could be dealing with bad faith insurance practice. The insurer owes you a detailed explanation of why your claim was denied.
  • Lack of effort. If you are facing a liability judgment, your insurance company is legally required to attempt to reach a settlement and protect your interests. Failure to do so may be a sign that your insurer is acting in bad faith.

If you suspect that your insurance company is acting in bad faith, contact our Atlanta insurance litigation attorneys at Carroll Law Firm. Call at 404-816-4555 to determine whether the insurer’s actions constitute bad faith.

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