- 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.
- 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.
History. 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.
Cross references.
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 .
Code Commission notes.
Pursuant to Code Section 28-9-5, in 2001, “first-class mail” was substituted for “first class mail” in subsection (b).
Law reviews.
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 article with annual survey on insurance law, see 73 Mercer L. Rev. 119 (2021).
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).