New Procedure for Settlement Demands to Insurance Companies Now in Effect in Georgia

For Georgia motor vehicle wreck cases arising after July 1, 2013, a new procedure is now in effect which was designed to give insurance companies adequate but not unreasonable time to respond to a pre-suit settlement demand by an injured party without being subjected to a subsequent bad faith claim for failing to settle the case within policy limits.  

The new Code Section, O.C.G.A. § 9-11-67.1, provides a minimum of 30 days for a defendant (or his liability insurance company) to respond to a settlement offer made before suit is filed, in case arising from the use of a motor vehicle.  The new law allow the insurance adjuster “to seek clarification regarding terms, liens, subrogation claims, standing to release claims, medical bills, medical records, and other relevant facts,” without that being deemed a counteroffer.  The demand must be sent by “certified mail or statutory overnight delivery, return receipt requested” and shall specifically reference the new Code section.  This new procedure applies only in personal injury or death cases arising from the use of a motor vehicle.  Lawyers should exercise caution in making settlement demands under the new procedure, to ensure compliance, and to preserve a possible bad faith claim against the liability insurer if it refuses to pay the claim in the amount demanded.

Click here to review the complete text of the new law.

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