2021 Georgia Code
Title 33 - Insurance
Chapter 4 - Actions Against Insurance Companies
§ 33-4-6. Liability of Insurer for Damages and Attorney's Fees; Notice to Commissioner and Consumers' Insurance Advocate

1. In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action against the insurer. The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. The amount of any reasonable attorney's fees shall be determined by the trial jury and shall be included in any judgment which is rendered in the action; provided, however, that the attorney's fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney's fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney's fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney's fees are not controlling as to the fees which may be agreed upon by the plaintiff and the plaintiff's attorney for the services of the attorney in the action against the insurer.
2. In any action brought pursuant to subsection (a) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner of Insurance a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.

(Ga. L. 1872, p. 43, § 1; Code 1873, § 2850; Code 1882, § 2850; Civil Code 1895, § 2140; Civil Code 1910, § 2549; Code 1933, § 56-706; Code 1933, § 56-1206, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1962, p. 712, § 1; Ga. L. 2001, p. 784, § 1; Ga. L. 2015, p. 1088, § 21/SB 148; Ga. L. 2016, p. 864, § 33/HB 737.)

- Imposing administrative fine for acts of representatives, including refusal to pay claims without cause, § 33-3-20.

Liability of unauthorized foreign or alien insurer failing to pay according to terms of insurance contract, § 33-5-58.

Liability for failing or refusing in bad faith to pay under uninsured motorist coverage, § 33-7-11(j).

Prompt payment of health benefit claims, § 33-24-59.5.

- Pursuant to Code Section 28-9-5, in 2001, "first-class mail" was substituted for "first class mail" in subsection (b).

- For article surveying recent legislative and judicial developments regarding Georgia's insurance laws, see 31 Mercer L. Rev. 117 (1979). For article discussing Georgia provisions concerning damages for insurer's failure to pay first-party claims, see 14 Ga. L. Rev. 497 (1980). For article surveying Georgia cases in the area of insurance from June 1979 through May 1980, see 32 Mercer L. Rev. 79 (1980). For article discussing imposition of liability on insurer, "The Liability Insurance Policy - Above and Beyond Coverage: Extra-Contractual Rights and Duties," see 22 Ga. St. B.J. 134 (1986). For annual survey of insurance law, see 42 Mercer L. Rev. 259 (1990). For article, "Insurance," see 53 Mercer L. Rev. 281 (2001). For article, "Bad Faith in Insurance Claim Handling in Georgia: An Overview and Update," see 9 Ga. St. B.J. 10 (2003). For annual survey of insurance law, see 56 Mercer L. Rev. 253 (2004). For survey article on insurance law, see 59 Mercer L. Rev. 195 (2007). For annual survey on insurance, see 61 Mercer L. Rev. 179 (2009). For article, "What Does ERISA Have to do with Insurance?," see 14 (No. 7) Ga. St. B.J. 19 (2009). For annual survey on insurance law, see 64 Mercer L. Rev. 151 (2012). For annual survey on insurance law, see 66 Mercer L. Rev. 93 (2014). For annual survey of insurance law, see 67 Mercer L. Rev. 73 (2015). For article, "An Insurer's Duty to Settle: The Law in Georgia," see 22 Ga. St. B.J. 19 (Aug. 2016). For article, "The Peculiarities of Georgia Insurance Law," see 24 Ga. St. B.J. 18 (April 2019). For note, "Wrongful Refusal to Pay Insurance Claims in Georgia," see 13 Ga. L. Rev. 935 (1979). For note on the 2001 amendment to this Code section, see 18 Ga. St. U.L. Rev. 167 (2001). For comment on Life & Cas. Ins. Co. v. Freemon, 80 Ga. App. 443, 56 S.E.2d 303 (1949), see 12 Ga. B.J. 337 (1950). For comment on Spicer v. American Home Assurance Co., 292 F. Supp. 27 (N.D. Ga. 1967), see 6 Ga. St. B.J. 225 (1969).

ANALYSIS

• General Consideration
• Demand for Payment
• Bad Faith Refusal to Pay
• Procedure

RESEARCH REFERENCES

Am. Jur. 2d.

- 44 Am. Jur. 2d, Insurance, §§ 107, 108.

Actions Against Insurer for Bad Faith Failure to Settle Claim, 21 Am. Jur. Trials 229.

- 46A C.J.S., Insurance, §§ 2166 et seq., 2169 et seq.

- Validity of statutory provision for attorneys' fees, 90 A.L.R. 530.

Remedy and measure of recovery where insurer breaches its contract to pay indemnity periodically, 99 A.L.R. 1171.

Validity, construction, and effect of statutory or policy provisions which give injured or damaged person right of action against insurer in respect of indemnity or liability insurance voluntarily carried, 106 A.L.R. 516.

What persons or corporations, contracts or policies, are within statutory provisions allowing recovery of attorney's fee penalty against insurance companies or against companies dealing in specified kinds of insurance, 126 A.L.R. 1439.

Refusal of automobile liability or indemnity insurer to assume defense of action against insured upon ground that claim upon which action is based is not within coverage, 133 A.L.R. 1516; 49 A.L.R.2d 694; 50 A.L.R.2d 458.

Effect of insurer's wrongful rejection of insured's claim under disability clause of life policy, 140 A.L.R. 781.

Compromise by insured as affecting right to recover against liability or indemnity insurer, either where claim exceeds limit of liability under policy, or where insurer denies liability on policy, refuses to defend, or otherwise delays taking action, 142 A.L.R. 809.

Necessity and sufficiency, or waiver, of demand as a condition of statutory liability of insurer for failure to pay delay in paying loss, 145 A.L.R. 343.

Liability of insurer based upon its act of withdrawal after assumption of defense, 167 A.L.R. 243.

Remedies of insured other than direct action on policy where fire or other property insurer refuses to comply with policy provisions for appointment of appraisers to determine amount of loss, 44 A.L.R.2d 850.

Consequences of liability insurer's refusal to assume defense of action against insured upon ground that claim upon which action is based is not within coverage of policy, 49 A.L.R.2d 694; 50 A.L.R.2d 458.

Insurer's liability under accident policy which terminated after accidental injury but prior to completion of medical treatment, hospitalization, and the like, 75 A.L.R.2d 876.

Liability insurer's liability for interest and costs on excess of judgment over policy limit, 76 A.L.R.2d 983.

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

What constitutes "trial," "final trial," or "final hearing" under statute authorizing allowance of attorneys' fees as costs on such proceeding, 100 A.L.R.2d 397.

Beneficiary's ignorance of existence of life or accident policy as excusing failure to give notice, make proofs of loss, or bring action within time limited by policy or statute, 28 A.L.R.3d 292.

Insurer's failure to pay amount of admitted liability as precluding reliance on statute of limitations, 41 A.L.R.3d 1111.

Insurer's liability for consequential or punitive damages for wrongful delay or refusal to make payments due under contracts, 47 A.L.R.3d 314.

Amount of attorney's compensation, 57 A.L.R.3d 475; 57 A.L.R.3d 550; 57 A.L.R.3d 584; 58 A.L.R.3d 201; 58 A.L.R.3d 235; 58 A.L.R.3d 317; 17 A.L.R.5th 366; 23 A.L.R.5th 241.

Insured's payment of excess judgment, or portion thereof, as prerequisite of recovery against liability insurer for wrongful failure to settle claim against insured, 63 A.L.R.3d 627.

Right of injured person recovering excess judgment against insured to maintain action against liability insurer for wrongful failure to settle claim, 63 A.L.R.3d 677.

Construction and application of state statute or rule subjecting party making untrue allegations or denials to payment of costs or attorney's fees, 68 A.L.R.3d 209.

Validity of statute allowing attorney's fee to successful claimant but not to defendant, or vice-versa, 73 A.L.R.3d 515.

Recoverability of punitive damages in action by insured against liability insurer for failure to settle claim against insured, 85 A.L.R.3d 1211.

Insured's right to recover attorney's fees incurred in declaratory judgment action to determine existence of coverage under liability policy, 87 A.L.R.3d 429.

Allocation of defense costs between primary and excess insurance carriers, 19 A.L.R.4th 107.

Modern status of rules requiring liability insurer to show prejudice to escape liability because of insured's failure or delay in giving notice of accident or claim, or in forwarding suit papers, 32 A.L.R.4th 141.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim, 33 A.L.R.4th 579.

Excess carrier's right of action against primary carrier for improper or inadequate defense of claim, 49 A.L.R.4th 304.

Liability of independent or public insurance adjuster to insured for conduct in adjusting claim, 50 A.L.R.4th 900.

Duty of insurer to pay for independent counsel when conflict of interest exists between insured and insurer, 50 A.L.R.4th 932.

Credit life insurer's punitive damage liability for refusing payment, 55 A.L.R.4th 246.

Emotional or mental distress as element of damages for liability insurer's wrongful refusal to settle, 57 A.L.R.4th 801.

Liability insurance: third party's right of action for insurer's bad-faith tactics designed to delay payment of claim, 62 A.L.R.4th 1113.

Liability insurer's postloss conduct as waiver of, or estoppel to assert, "no-action" clause, 68 A.L.R.4th 389.

Computation of net "loss" for which fidelity insurer is liable, 5 A.L.R.5th 132.

Liability of insurer, or insurance agent or adjuster, for infliction of emotional distress, 6 A.L.R.5th 297.

Admissibility of polygraph or similar lie detector test results, or willingness to submit to test, on issues of coverage under insurance policy, or insurer's good-faith belief that claim was not covered, 7 A.L.R.5th 143.

Excessiveness or adequacy of attorneys' fees in matters involving real estate - modern cases, 10 A.L.R.5th 448.

What constitutes mental illness or disorder, insanity, or the like, within provision limiting or excluding coverage under health or disability policy, 19 A.L.R.5th 533.

Liability of insurer for prejudgment interest in excess of policy limits for covered loss, 23 A.L.R.5th 75.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim - Particular conduct of insurer, 115 A.L.R.5th 589.

What constitutes bad faith on part of insurer rendering it liable for statutory penalty imposed for bad faith in failure to pay, or delay in paying, insured's claim - Particular grounds for denial of claim: matters relating to policy, 116 A.L.R.5th 247.

Calculations of attorneys' fees under Federal Tort Claims Act - 28 USCS sec. 2678, 86 A.L.R. Fed. 866.

Pre-emption by Federal Longshore and Harbor Workers' Compensation Act of state law claims for bad-faith dealing by insurer or agent of insurer, 90 A.L.R. Fed. 723.

Construction and application of Longshore and Harbor Workers' Compensation Act (LHWCA) - Supreme Court cases, 72 A.L.R. Fed. 2d 1.

Federal Common Law and Preemption Under National Flood Insurance Act 42 U.S.C.A. §§ 4001 et seq., 36 A.L.R. Fed. 3d Art. 6.

Nature and Limitation of Insurance Coverage Under National Flood Insurance Act, 42 U.S.C.A. § 4013, 37 A.L.R. Fed. 3d Art. 5.

Employee as Entitled to Title VII Protections Despite Being Citizen of Foreign Country, 37 A.L.R. Fed. 3d Art. 8.