Bad Faith Insurance in Georgia (O.C.G.A. § 33-4-6)

When you pay insurance premiums, you expect your insurer to honor its obligations when you file a valid claim. Unfortunately, insurance companies do not always play fair. Some deny valid claims without justification, delay payments for months, or make settlement offers so low they bear no relation to the actual value of the claim. In Georgia, this conduct may constitute “bad faith” — and the law provides powerful penalties to hold insurers accountable.

This guide explains Georgia’s bad faith insurance law, how to recognize bad faith conduct, and what you can do to protect your rights.

What Is Bad Faith Insurance?

Bad faith insurance occurs when an insurer fails to deal fairly and honestly with its policyholders or claimants. Rather than fulfilling its contractual obligation to pay valid claims, the insurer prioritizes its own financial interests over its duty to the insured.

Georgia’s primary bad faith statute is O.C.G.A. § 33-4-6, which provides:

“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… the insurer shall be liable to pay such holder… not more than 50 percent of the liability of the insurer for the loss and all reasonable attorney’s fees for the prosecution of the action against the insurer.”

In plain terms: if your insurer refuses to pay a valid claim and that refusal is found to be in bad faith, the insurer faces a penalty of up to 50% of the claim amount plus your attorney’s fees — on top of paying the full claim.

The 60-Day Demand Requirement

Georgia’s bad faith statute has a critical procedural requirement that many people overlook. Before you can pursue a bad faith claim, you must:

1. Send a written demand to the insurer, specifying the amount owed and the basis for the claim
2. Wait 60 days for the insurer to respond
3. File suit if the insurer fails to pay within the 60-day period

This demand letter must be precise. It should clearly identify the policy, the loss, the amount being demanded, and the basis for the demand. Failing to send a proper demand letter — or failing to wait the full 60 days — can bar your bad faith claim entirely.

This is one of many reasons why working with an experienced attorney is essential in bad faith cases. The demand letter must be crafted carefully to preserve your rights under the statute.

Common Signs of Bad Faith Insurance Practices

Bad faith can manifest in many ways. Here are the most common tactics that may constitute bad faith under Georgia law:

Unreasonable Claim Denial

Denying a claim without a legitimate basis or without conducting a proper investigation. If the evidence clearly supports your claim but the insurer denies it anyway, this may be bad faith.

Unreasonable Delays

Dragging out the claims process without justification — failing to respond to communications, repeatedly requesting the same documents, or citing vague internal processes as reasons for delay.

Lowball Offers

Making settlement offers so far below the claim’s actual value that they demonstrate a refusal to negotiate in good faith. While insurers are entitled to negotiate, offers that bear no reasonable relationship to the evidence may constitute bad faith.

Misrepresenting Policy Terms

Telling you that your policy does not cover a loss when it actually does, or misrepresenting the terms, conditions, or exclusions of your policy.

Failure to Investigate

Denying a claim without conducting a reasonable investigation, or conducting an investigation that ignores evidence supporting the claim while focusing only on evidence that justifies denial.

Threatening Insureds

Using intimidation tactics to discourage you from pursuing a valid claim, such as threatening to cancel your policy, raise your rates, or blacklist you.

Georgia’s Bad Faith Insurance Laws

Georgia provides multiple legal avenues for holding insurers accountable for bad faith conduct:

O.C.G.A. § 33-4-6 — Bad Faith Penalty Statute

The primary bad faith statute. Provides for a penalty of up to 50% of the claim amount plus attorney’s fees when an insurer refuses to pay a valid claim in bad faith. This applies to first-party claims (claims against your own insurer).

O.C.G.A. § 33-6-34 — Unfair Claims Settlement Practices Act

Prohibits a range of unfair claims practices, including:

• Misrepresenting relevant facts or policy provisions
• Failing to acknowledge and act reasonably promptly upon communications
• Failing to adopt and implement reasonable standards for prompt investigation of claims
• Refusing to pay claims without conducting a reasonable investigation
• Failing to affirm or deny coverage within a reasonable time
• Not attempting in good faith to effectuate prompt, fair settlements when liability has become reasonably clear
• Compelling insureds to institute litigation to recover amounts due by offering substantially less than the amounts ultimately recovered

O.C.G.A. § 10-1-393 — Fair Business Practices Act

Georgia’s consumer protection statute prohibits unfair and deceptive business practices, which can include insurance claims handling. This statute may provide additional remedies beyond those available under the insurance-specific statutes.

First-Party vs. Third-Party Bad Faith

Understanding the difference between first-party and third-party claims is critical in Georgia bad faith law:

First-Party Claims

These are claims you make against your own insurance company — for example, a claim under your own UM/UIM coverage, MedPay, or collision coverage. O.C.G.A. § 33-4-6 directly applies to first-party claims, providing the 50% penalty and attorney’s fees.

Third-Party Claims

These are claims you make against the at-fault driver’s insurance company. Georgia’s bad faith remedies for third-party claims are more limited. However, the at-fault driver can assign their bad faith claim against their own insurer to you in certain circumstances, and other statutes (like the Unfair Claims Settlement Practices Act) may still apply.

How to Build a Bad Faith Case

Successfully pursuing a bad faith claim requires thorough documentation and preparation:

1. Document everything: Keep copies of all correspondence, including letters, emails, and notes from phone calls. Record dates, times, and the names of everyone you speak with.
2. Follow the rules: Comply with all policy requirements — report the claim promptly, cooperate with reasonable investigation requests, and provide requested documentation in a timely manner.
3. Send a proper demand letter: Work with an attorney to craft a demand letter that meets the requirements of O.C.G.A. § 33-4-6.
4. Preserve evidence: Keep all evidence related to your claim, including medical records, photos, police reports, and witness statements.
5. Track the timeline: Note every delay, every missed deadline, and every unreturned communication. A pattern of delay can be powerful evidence of bad faith.

What Damages Can You Recover in a Bad Faith Claim?

If you successfully prove bad faith under O.C.G.A. § 33-4-6, you can recover:

• The full claim amount: The insurer must pay everything owed under the policy
• Bad faith penalty: Up to 50% of the claim amount
• Attorney’s fees: All reasonable attorney’s fees incurred in pursuing the bad faith claim

For example, if your insurance claim is worth $200,000, a successful bad faith action could result in:

• $200,000 (claim value)
• $100,000 (50% bad faith penalty)
• Attorney’s fees (varies based on complexity)

This means the insurer could owe $300,000+ — a powerful incentive for insurance companies to handle claims fairly.

Filing a Complaint with the Georgia Department of Insurance

In addition to pursuing a bad faith lawsuit, you can file a complaint with the Georgia Department of Insurance (DOI). The DOI regulates insurance companies operating in Georgia and can investigate complaints about unfair claims practices. While the DOI cannot award you damages, a regulatory investigation can pressure the insurer to resolve your claim fairly. See our step-by-step guide on how to file a Georgia Department of Insurance complaint.

Common Insurer Defenses to Bad Faith Claims

Insurers defend against bad faith claims by arguing:

• “We had a reasonable basis for denial.” The insurer claims its investigation supported the denial, even if the investigation was flawed.
• “The claim was fairly debatable.” If reasonable minds could disagree about whether the claim is covered, the insurer may argue the denial was not in bad faith.
• “The insured failed to comply with policy requirements.” The insurer argues you did not meet your obligations under the policy.
• “The demand letter was deficient.” The insurer attacks the form or substance of your demand letter to avoid the bad faith penalty.

These defenses highlight why it is essential to work with an attorney who understands Georgia’s bad faith law and can anticipate and counter these arguments.

Frequently Asked Questions

What is bad faith insurance in Georgia?

Bad faith insurance in Georgia occurs when an insurer unreasonably refuses to pay a valid claim. Under O.C.G.A. § 33-4-6, if an insurer refuses to pay a claim and a court determines the refusal was in bad faith, the insurer must pay the claim amount plus a penalty of up to 50% of the claim value, plus reasonable attorney’s fees.

What are the penalties for bad faith insurance in Georgia?

Under O.C.G.A. § 33-4-6, the penalties include: (1) the full amount of the insurance claim, (2) an additional penalty of up to 50% of the claim amount, and (3) reasonable attorney’s fees. This means if your claim is worth $100,000, the insurer could be required to pay up to $150,000 plus your attorney’s fees.

How do I prove bad faith against an insurance company in Georgia?

To prove bad faith under O.C.G.A. § 33-4-6, you must show: (1) you made a demand for payment under the policy, (2) the insurer refused to pay within 60 days of the demand, and (3) the refusal was in bad faith. The 60-day demand requirement is a critical procedural step that must be completed before filing a bad faith lawsuit.

Can I file a bad faith claim against the other driver’s insurance?

Georgia’s bad faith statute (O.C.G.A. § 33-4-6) generally applies to first-party claims — meaning claims you make against your own insurer. For third-party claims (claims against the at-fault driver’s insurer), the bad faith remedies are more limited. However, you may have claims under O.C.G.A. § 33-6-34 (Unfair Claims Settlement Practices) or O.C.G.A. § 10-1-393 (Fair Business Practices Act).

What is the 60-day demand letter requirement for bad faith in Georgia?

Before you can pursue a bad faith claim under O.C.G.A. § 33-4-6, you must send the insurer a written demand for payment. The insurer then has 60 days to pay the claim. If the insurer fails to pay within 60 days and a court later determines the refusal was in bad faith, the penalties apply. This demand letter is a mandatory prerequisite — you cannot skip it.

Talk to a Georgia Bad Faith Insurance Attorney

If you believe your insurance company is acting in bad faith, you need an attorney who understands Georgia’s bad faith laws and has experience taking on major insurers. At Wetherington Law Firm, we have successfully pursued bad faith claims against some of the largest insurance companies in the country.

Call us today at (404) 888-4444 for a free consultation. We will review your claim, assess whether bad faith may be involved, and explain your legal options.

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