What does O.C.G.A. Section 33-4-6 mean for policyholders?

O.C.G.A. Section 33-4-6 is Georgia’s statutory bad faith law. It was written to deter insurers from refusing legitimate claims by making that refusal financially costly.

If your insurer refuses to pay a covered loss and that refusal lacks reasonable cause, and you follow the required procedural steps, a Georgia court can award you the full amount of the covered loss, a penalty of up to 50 percent of the loss (the exact amount is set by the court based on the circumstances), and reasonable attorney fees. This is significant because attorney fees in insurance litigation can be substantial, and the threat of that exposure changes the negotiating dynamic.

The procedural requirements matter. Before you can file suit under the statute, you must send a written demand to the insurer. The insurer then has 60 days from receipt of that demand to pay the claim. If they pay within those 60 days, the bad faith penalty does not apply, even if their earlier refusal was unreasonable. This waiting period is mandatory. Filing suit before the 60-day window closes will result in the bad faith penalty being unavailable even if you win on the underlying claim.

The statute applies to refusals to pay, not to disagreements about the amount of a claim. If the insurer pays something but you disagree on the value, you may need a different legal theory or the appraisal process.

Not every claim that goes wrong qualifies under this statute. Courts have interpreted without reasonable cause to mean the insurer had no legitimate factual or legal basis for denying the claim, not merely that their decision was incorrect. The distinction matters when deciding whether to pursue a bad faith action.

Before sending a formal demand letter, consulting with a licensed attorney who handles insurance disputes in Georgia is strongly recommended. The demand letter itself starts the 60-day clock and sets the legal record for everything that follows.