Atlanta Insurance Bad Faith Claims Lawyer

Bad faith insurance laws are written to protect consumers from the denial of insurance proceeds due under a contract without reason. They are also written to curtail unethical business practices of insurance companies. Bad faith may be refusing to pay a legitimate claim that is compliant with the policy guidelines, or it might result from unreasonable delays in paying a claim and compensation, along with an obstructive adjusting process. An insurer should pay a legitimate claim according to its own contract and should do so in a timeframe that does not result in the insured having to incur additional losses. Unfortunately, there are times when an insurance company delays or fails to honor its coverage obligations in bad faith. It is our goal to represent clients, working aggressively to recover compensation for any losses that have resulted from a bad faith incident involving the delayed payment of insurance claims.

How does Georgia law define bad faith?

In its most basic terms, bad faith is the failure to pay out claims or to provide an insured with a defense of a lawsuit without a basis in the policy of insurance. It can also be the deliberate and intentional refusal to perform according to the contract. Not every failure by an insurance company to make payments constitutes bad faith. In fact, it is important to know what is and is not covered by an insurance policy,  whether it’s auto or motorcycle insurance, homeowner’s insurance, health insurance, premises liability insurance, life insurance or another type of policy.

Compliance with any notice provisions that require the insured to work with the company in order to provide certain information is crucial. While it may seem uncommon for a corporation to actively ignore its contractual obligations to its customers, it happens more often than most realize.  Many insurance companies will read any exclusion from insurance coverage as broadly as possible under the policy. If an insurance company has intentionally tried to slow down the process in an attempt to exhaust the insured to the point that he abandons reimbursement efforts, this can equate to bad faith, and it may signal the need for a qualified and experienced bad faith attorney.

What happens when bad faith is exhibited by an insurance company?

A bad faith finding can significantly affect an insurance claim. Not only that, but if bad faith is determined, it can mean financial recovery for the wronged party. First, there are specific notice provisions and opportunities that must be provided before a bad faith claim may be pursued against an insurance company. Next, if the insured complies with all of the requirements of the policy as well as Georgia law, a judge or jury can determine that an insurance company’s refusal to pay out proceeds of insurance was in bad faith. The insurer may be liable to pay its insured not more than 50 percent of the liability of the insurer or the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution by the insured of the action against the insurer. This is on top of what the insurance company was required to pay initially.

While that sounds straightforward, there are specific elements that must be proven if a successful case is to be brought. The law that addresses an insurance company’s duties to its policyholders is known as “implied covenant of good faith and fair dealing.” If a Georgia insurance company violates that law, the policyholder can seek relief since the insurance company has breached its contract. However, the state of Georgia’s statute on bad faith denial of claims is the exclusive remedy for collecting damages and attorney’s fees above the amount due under the policy.

How can an insurance company fight a bad faith accusation?

Insurance companies understand how these legal cases work. An insurance company will generally have several defenses at the ready and is prepared to argue policy language that excludes coverage in most cases. If it is truly an unethical company, odds are, it has faced these types of claims in the past.

One of the more common ways a company will attempt to wreak havoc is by laying blame elsewhere – and that usually means at the plaintiff’s feet. Many insurers may attempt to discredit the information provided by the plaintiff in the application or the policy and cite that the applicant provided false or erroneous information. A more straightforward way might include that the plaintiff simply did not understand the contract’s limitations. It might argue that even after its own internal investigation, it is certain it has done nothing illegal and should not be held legally liable.

Other times, if it proves to the court that it went above and beyond its contractual and legal obligations to determine whether the claim is indeed legitimate, the court may rule there has been no bad faith exhibited, even if the insurance company is obligated to pay you on a claim made under your insurance policy. Additionally, bad faith will not exist if the company is not obligated to pay a claim in the first place. This can happen if there is a failure to provide an insurance company timely notice of a claim or if there is an exclusion from coverage that applies to the claim made against the company. These cases are not always clear on the ultimate outcome. Still, it is important for those who have been wronged to seek legal protection in order to protect their rights and have an attorney review any denials of coverage.

What is the duty to defend?

In addition to a requirement to cover losses suffered by a business in connection with an insurance policy, most insurance policies held by businesses also include a duty of the insurance company to defend you against lawsuits that may be covered by the insurance policy. The extent of the insurer’s duty is determined by the contract. This is not an independent duty of insurance carriers under Georgia law. However, many insurance policies include provisions requiring the insurer to provide a defense of any lawsuit or other claim made against the insured if covered under the policy. Or, policies may provide for reimbursement for the costs of a defense of a lawsuit or other claim covered by the policy.

Georgia law tends to be favorable to insureds, rather than insurers, when construing the insurer’s duty to defend its policyholder. A lawsuit filed against a business, even if it is frivolous and false, may require the insurance company to provide a defense of the lawsuit. In addition to requiring insurers to provide coverage when the insurance policy contains a duty to defend and the complaint arguably places the injury within the policy’s coverage, Georgia law also provides that in certain circumstances, the insurer is required to provide a defense even where the allegations of the lawsuit would otherwise exclude coverage. A common example of this is when a plaintiff in a lawsuit claims that the injury allegedly caused by the covered company is a result of intentional actions by the company or employees of the company. Most insurance policies will exclude injuries caused by intentional conduct from the policy’s definition of injuries covered by the policy.

Generally speaking, the insurer is under no obligation to investigate or verify the truth of a claim made. However, when an insured provides notice to the insurer of facts that would place the lawsuit or claim within coverage, the insurer has a duty to investigate the lawsuit. Once an insurer has been given notice of factual contentions by the insured, the insurer is required under Georgia law to base its decision whether or not to provide insurance coverage and a duty to defend on “true facts.” Failing to properly investigate the “true facts” and base the acceptance or denial of liability for the lawsuit thereon can expose the insurer to penalties under Georgia’s bad faith laws. If you believe that you’ve been the victim of a bad faith insurance case, we invite you to contact our law offices for a consultation. Our goal is to help you recover the compensation you deserve for your losses in the form of a settlement or jury award. Call Hecht Walker Jordan, P.C. at 404-348-4881.

Disclaimer

This information was posted on 08-23-2016 and does not constitute legal advice nor does it create an attorney-client relationship. The law changes on a daily basis, and the reader should engage an attorney through a written agreement before taking action in this area of the law.