Bad Faith Insurance Claims Handling

This page describes Georgia law and regulation, which differs from other states. See the Alabama version of this guide or send us your details through a coverage review.

What is insurance bad faith?

Bad faith occurs when a carrier unreasonably denies or delays a valid claim, or fails to fulfill its contractual duties under your policy. What counts as bad faith, and what penalties apply, varies significantly by state -- some states set a fixed statutory penalty, others apply a common-law standard with case-by-case damages.

What are the signs of bad faith handling?

• Denial without citing a specific policy provision
• Repeated requests for documents you've already submitted
• Failure to acknowledge or respond within required timeframes
• Settlement offers significantly below documented loss without explanation
• Misrepresentation of policy terms or coverage
• Failure to conduct a prompt and thorough investigation
• Pressure to accept a quick settlement before full damage is assessed

What should you do if you suspect bad faith?

If your carrier is unreasonably denying or delaying a valid claim, these three steps address it in order of escalation.

1. 1
   Build your documentation

   Compile every interaction, dates, names, what was said or written. This contemporaneous record becomes your evidence file if you escalate or litigate.

2. 2
   File a formal complaint with your state Department of Insurance

   Every state has an insurance regulator with authority over carriers licensed there. A formal complaint often prompts corrective action faster than months of direct communications.

3. 3
   Consult a licensed insurance attorney in your state

   Bad faith standards vary significantly by state -- some states set a fixed statutory penalty, others apply a common-law standard with case-by-case damages. An attorney licensed in your state can confirm which standard applies and whether you have a claim.

How long do you have to file a bad faith claim?

Time limits for bad faith claims vary by state -- some run from a fixed statutory period, others from your state's general tort limitations period. Once you suspect bad faith, act promptly and consult an attorney licensed in your state to confirm the deadline before it expires.