2020 Georgia Code
Title 33 - Insurance
Chapter 32 - Property Insurance
§ 33-32-5. Amount of Insurance in Certain Fire Policies Deemed Conclusive as to Value of Property Covered

1. Whenever any policy of insurance is issued to a natural person or persons or to any legal entity wholly owned by a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his or her behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss, provided that, if loss occurs within 30 days of the original effective date of the policy, the insured shall be entitled to the actual loss sustained not exceeding the sum insured. Nothing in this Code section shall be construed as prohibiting the use of coinsurance or as preventing the insurer from repairing or replacing damaged property at its own expense without contribution on the part of the insured.
2. Subsection (a) of this Code section shall not apply where:
   1. The building or structure is not wholly destroyed by fire;
   2. Insurance policies are issued or renewed by more than one company insuring the same building or structure against fire and the existence of the additional insurance is not disclosed by the insured to all insurers issuing policies;
   3. Two or more buildings or structures are insured under a blanket form for a single amount of insurance; or
   4. The completed value of a building or structure is insured under a builders' risk policy.

(Code 1933, § 56-3206, enacted by Ga. L. 1971, p. 657, § 1; Ga. L. 2016, p. 237, § 1/SB 137.)

- For annual survey article discussing developments in insurance law, see 51 Mercer L. Rev. 313 (1999). For annual survey article on evidence law, see 52 Mercer L. Rev. 303 (2000).

JUDICIAL DECISIONS

Insured not limited to attempted sale price before fire.

- Although insured attempted to sell the property before the fire, insured was not limited to that sale price as the amount of the insurable interest, but could recover the entire policy amount. Forbus v. Allstate Ins. Co., 603 F. Supp. 113 (N.D. Ga. 1984).

- O.C.G.A. § 33-32-5 did not apply to an insurance rider providing for payment of the full replacement cost of destroyed property and requiring replacement or repair as a condition precedent. Marchman v. Grange Mut. Ins. Co., 232 Ga. App. 481, 500 S.E.2d 659 (1998).

- Trial court properly determined that the insureds were not entitled to the maximum amount of coverage set forth in the insureds' homeowner's policy under O.C.G.A. § 33-32-5, because the umpire determined that the insureds' home was not wholly destroyed during the fire. Bell v. Liberty Mut. Fire Ins. Co., 319 Ga. App. 302, 734 S.E.2d 894 (2012).

- Policy containing provisions indicating that the insured dwelling was under construction was a "builders' risk" policy and, therefore, when the dwelling burned before completion, subsection (a) of O.C.G.A. § 33-32-6 did not override the provision for payment of the amount necessary to rebuild the structure, not the full amount of the policy. Georgia Farm Bureau Mut. Ins. Co. v. Garzone, 240 Ga. App. 304, 523 S.E.2d 386 (1999).

Cited in Allstate Ins. Co. v. Baugh, 173 Ga. App. 615, 327 S.E.2d 576 (1985); Southern Ins. Underwriters, Inc. v. Ray, 188 Ga. App. 469, 373 S.E.2d 236 (1988); Georgia Farm Bureau Mut. Ins. Co. v. Brown, 192 Ga. App. 504, 385 S.E.2d 87 (1989); Nationwide Mut. Fire Ins. Co. v. Wiley, 220 Ga. App. 442, 469 S.E.2d 302 (1996).

RESEARCH REFERENCES

ALR.

- Divisibility of fire insurance policy covering building and contents, 47 A.L.R. 650.

Act of insured while mentally incompetent in causing loss otherwise within coverage of property or liability insurance policy as defense or ground of setoff or counterclaim, 110 A.L.R. 1060.

Divisibility of fire insurance policy as regards subjects of insurance as affected by the fact that premium is payable at a named rate per one hundred dollars of insurance, 129 A.L.R. 651.

Applicability of "increase of hazard" clause in fire insurance policy to conditions occurring accidentally, 34 A.L.R.2d 717.

Test or criterion of "actual cash value" under insurance policy insuring to extent of actual cash value at time of loss, 61 A.L.R.2d 711.

Insurer's liability as affected by refusal of public authorities to permit reconstruction or repair after fire, 90 A.L.R.2d 790.