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What Do You Do When the Insurance Company Takes Too Long?

When you suffer a personal injury in an auto accident, you understandably expect your insurance company will pay your claim promptly. Of course, that is often not how the system actually works. Insurance companies are not exactly in business to make your life better. They are in business to make money for their shareholders. This provides a substantial incentive to minimize the amount of benefits paid out to policyholders.

But an insurance company cannot simply string you along indefinitely. The State of Georgia actually has fairly strict laws that set a series of deadlines that insurance companies must follow when presented with a claim. If the insurer simply ignores these rules, you may have the right to take the insurance company to court and seek additional compensation.

Georgia’s TImeline for Paying Insurance Claims

Basically, once you file a first-party claim with your insurance company, that starts a 40-day timeline. There are several stages to this timeline, which can be broken down as follows:

  • The process begins when you file a notification of your claim. This can be done by giving notice to your insurance agent. Once the insurer receives the claim, it then has 15 days to acknowledge receipt. This can be done in writing, or by sending you any required “proof of loss” forms, together with reasonable instructions on how to complete them. Acknowledgment is not necessary if the insurer simply pays your claim within the 15-day period.
  • Once you file any necessary proof of loss forms, the insurance company has 15 days from receipt to either accept or deny your claim. (This applies to auto accident claims only; other types of insurance claims, such as those involving losses due to fire, have a 60-day deadline.) If for some reason your insurer does not require any proof of loss forms, it has 30 days to conduct a “reasonably necessary” investigation into your claim.
  • If the insurance company accepts your claim and does not dispute the amount, it then has 10 days to send you payment.

If the insurer needs more time to investigate your claim before making a final decision to accept or deny, it must notify you within 5 business days of the end of the second 15-day period described above. The insurer must explain the reasons why it needs more time and an estimate of how long they require. In no case, however, can the insurance company take more than 60 days, starting from the date they were notified of your claim. (The insurer can go past this deadline if they asked you for additional information and you have not responded.)

Suing an Insurance Company for “Bad Faith” in Georgia

Meeting the above deadlines is not optional. An insurer that does not process and respond to your claim in a timely manner is what Georgia law calls an “unfair settlement claims practice.” There are other acts that are considered unfair practices, such as knowingly misrepresenting any relevant facts related to a policyholder’s insurance coverage or not attempting to settle a claim in good faith.

Policyholders cannot take direct legal action for an unfair settlement claims practice. Rather, state law vests enforcement authority with the Georgia Insurance and Safety Fire Commissioner. The Commissioner can initiate legal action against the insurer and, if successful, impose fines and other civil penalties.

A policyholder can, however, file a “bad faith” lawsuit against an insurance company. Bad faith requires the policyholder to prove: (1) their claim was covered by the insurance policy in question; (2) the insurance company refused to pay the claim within 60 days of demanding payment prior the filing of the lawsuit; and (3) the insurer’s failure to pay the claim was motivated by bad faith.

To be clear, denying a claim is not, in and of itself, proof of bad faith. But if an insurer deliberately delays payment of a claim past the legal deadlines described above, that can be sufficient to prove bad faith. So would an insurer’s decision to discount or reduce the amount of the claim allowed without giving a valid reason.

If a court agrees with the policyholder that there was bad faith, the judge can order the insurance company to not only pay the full amount of the claim, but also damages equal to 50 percent of the claim or $5,000, whichever amount is greater, as well as the policyholder’s legal fees and costs.Before taking any action against an insurance company, however, it is best to speak with a qualified Atlanta car accident attorney. Contact Ponton Law today to schedule a free case evaluation.