Recovering more than insurance policy limits after an accident

If you are injured after a car accident, you can likely recover from the at-fault driver’s insurance company and your own insurance company. But many times, there is not enough insurance to cover more serious injuries. Georgia allows for an injured person to recover more than the at-fault driver’s insurance policy limits in certain circumstances—where the insurance company acts in “bad faith.” Unfortunately, those circumstances are very limited and are often times out of your control.

In Georgia, drivers are required to have “bodily injury” insurance to protect the drivers on the road around them. However, the minimum amount of coverage required is $25,000 per person in accident and $50,000 per accident. That means an injured driver can recover up to $25,000 if driving alone; but, if there are 2 or more occupants who are injured, the total amount of insurance for all of the occupants is $50,000.

Another kind of insurance many drivers protect themselves with is “uninsured motorist” insurance. This insurance protects the insured from drivers with no insurance or drivers without enough insurance. However, uninsured motorist insurance is not required in Georgia. If you have followed the math correctly, you might have realized that in some circumstances someone catastrophically injured in a car crash may only be able to recover $25,000 to pay for their medical bills and cover their pain and suffering.

You may ask, can I recover money from the at-fault driver personally? The answer is yes, but most people do not have enough money to satisfy a judgment. Therefore, attempting to recover from someone personally can be a futile exercise that wastes unnecessary time and money–especially where insurance companies require a release of claims against their insureds in order to receive payment under the policy.

The insurance company’s responsibility to its insured and “bad faith”

When you purchase car insurance, you enter into a contract with the insurance company. According to Georgia law, the insurance company has a fiduciary responsibility to you to act in good faith and pay benefits to you when it is warranted and covered by their policy. This includes when you are injured because of a car or truck accident and incur damages up to or in excess of your policy limits.

Where the insurance company fails to pay a claim for personal injury that is covered by their policy, they can be required to pay amounts higher than the limits of their insured’s policy if they denied the claim in “bad faith.” But first, the injured person must give the insurance company an opportunity to pay the limits of their policy. For example, if an injured person makes a claim with their insurance company for $25,000 or the full limits of their policy, they have to give the insurance company time to evaluate their claim and pay the demanded amount before they can attempt to recover more than $25,000 directly from the insurance company.

To prove that an insurance company acted in bad faith, an injured person must make a demand for money under an insurance policy and show that under the terms of the policy and the facts surrounding the response, the insurer had no good cause for rejecting or delaying payment. If bad faith does exist, a person may be able to recover an amount in excess of the insurance policy to the extent a jury at trial awards them that amount.

While claims for bad faith failure to settle are limited to what the jury awarded for the at-fault driver’s insurance, claims against your own uninsured motorist insurance provider are limited much more. Georgia law caps the “bad faith” recovery against your own insurance company under uninsured motorist coverage at 125% of the policy limits. So, if you have $25,000 in uninsured motorist benefits, your recovery is limited to $30,750.

The demand

A demand to an insurance company is usually a written letter asking for payment of a certain amount. But Georgia law requires certain requirements be met in order to recover more than the insurance policy. Prior to filing a lawsuit arising from a motor vehicle accident, the demand has to contain the following information and must be prepared by or with the assistance of an attorney:

1. The time period within which the offer to settle must be accepted (cannot be less than 30 days after the receipt of the offer);
2. Amount of payment to the claimant;
3. The party or parties released by the claimant if the offer is accepted (this is typically the driver who caused the crash);
4. The type of release the claimants will provide; and
5. The claims to be released

The rules that say what has to be in a demand to insurance company are very specific. Just recently, the Supreme Court of Georgia ruled that the insurance company did not have to pay a $5.3 million judgment against their insured because the injured person’s demand did not clearly specify the deadline to make payment.

If you are injured in an accident involving a tractor-trailer or automobile, you need to speak with an experienced Atlanta personal injury lawyer who specializes in maximizing your recover from the insurance company. Call us today at 404-800-9933 (or by clicking here) for a free consultation to hear how the personal injury lawyers at Rafi Law Firm can help you recover.

For more information about how automobile insurance works, click to check out our blog entitled “Understanding Automobile Insurance.”

To be prepared when you talk to an insurance adjuster after an accident, read our blog entitled “5 Things to Know Before Talking to the Insurance Company.”