Monday, May 18, 2009

Fighting Back Against Insurance Companies

            Don’t you hate getting taken by insurance companies?  I know most folks do.  You pay them tons of money, for years at a time, and then when you need them, they turn their back on you.  Insurance companies love to take your money, but they hate to pay your claims.    They pull out every exclusion and nickel and dime you to death.  Well, you can fight back, and here’s how.

            In Georgia, we have what is known as a “Bad Faith” statute.  O.C.G.A. § 33-4-6 requires an insurance company to pay for a loss covered by insurance within 60 days of a proper demand.  If the insurance company does not pay the demand within 60 days, the insured is entitled to recover an extra 50% of the liability or $5000 whichever is greater, plus reasonable Attorney’s fees. 

            Let’s illustrate with a real world example.  You have a homeowner policy with ACME insurance.  The policy insures you against theft of items taken from your home.  Someone breaks in your home and steals $4,000 of your stuff.  You file a claim with your insurance company, and they refuse to pay.   On top of refusing to pay, the “Special Investigator” also insinuates that you may be attempting to commit insurance fraud by filing this claim.  At this point, you’ve got two options. 

    Option 1 is probably the most commonly pursued and the one the insurance company is betting on.  You’re mad, insulted, but also busy as heck.  It’s just $4,000 and you figure, “It’s just not worth it.  They’ve got all the money and power.”  So you do what the insurance company predicts, what their mathematical studies indicate is most likely, and you just walk away.  They Win.  You Lose.

Option 2 is Fighting Back.  You talk to an Attorney about O.C.G.A. § 33-4-6.  You send ACME a proper demand.  The Attorney chews on the “Special Investigator”, the 60 days pass, and your Attorney files suit against the insurance company.  The insurance company then sends you a check for $4,000 and you say thank you very much, but we’re still going to teach you a lesson.  One of the great provisions of 33-4-6 is that payment after the 60 day window isn’t a defense to the bad faith claim.  The insurance company refuses to settle your “Bad Faith” claim.  You go to trial, pick a jury, and tell them what a terrible company ACME is.  They award you the extra $5000 (because $5000 is greater than 50% of $4000), plus Attorney’s Fees.  

I like Option 2.

If you need help, call me at 678-383-1690 or visit my website at  If for whatever reason I can't help you, I'll point you in the direction of someone who can.

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