What can I do if my insurer refuses to pay a valid claim in Georgia?

Georgia's bad-faith statute, O.C.G.A. 33-4-6, gives policyholders a legal remedy when an insurer refuses to pay a valid claim without a reasonable basis, a legal standard known as "bad faith" (see the bad faith glossary entry for the full definition). The statute applies to claims under most Georgia auto, home, and other property and casualty policies.

The process starts with a written demand. A policyholder, or an attorney acting for them, sends the insurer a written demand for payment, and the statute gives the insurer 60 days to pay the claim. If the insurer still refuses to pay after that 60-day window, and a court later finds the refusal was made without a reasonable basis, the court can award the amount of the original loss plus a penalty of up to 50 percent of the loss or $5,000, whichever amount is greater, along with the policyholder's attorney fees.

Example: an insurer denies a $10,000 covered water-damage claim without investigating the cause of the loss or citing a specific policy exclusion. The policyholder sends a written demand; the insurer still refuses to pay after 60 days. If a court finds the denial was made without a reasonable basis, it can award the $10,000 loss plus a bad-faith penalty of up to $5,000 (50 percent of $10,000), plus attorney fees.

Not every denied claim qualifies as bad faith. An insurer that denies a claim based on a genuine, documented coverage dispute, such as a specific policy exclusion that applies to the facts, is exercising a contractual right, not acting in bad faith. Georgia's bad-faith statute targets refusals made without a reasonable basis, not every disagreement over what a policy covers.

A policyholder who believes a claim was wrongfully denied can also file a complaint with the Georgia Office of Commissioner of Insurance and Safety Fire (Georgia OCI), which regulates insurer claims-handling practices in the state, separately from any court action under O.C.G.A. 33-4-6.

Fault and liability questions can also affect whether and how much a claim pays; Georgia's at-fault framework and comparative negligence rules are covered in is Georgia a no-fault state for car insurance? and what happens if I am partly at fault for a crash in Georgia?. Understanding what a policy actually covers before a claim happens is one purpose of a free coverage review; the auto insurance overview and Georgia auto insurance guide explain how claims and coverage typically work together. Coverage is available through Olive Cover from multiple carriers licensed in Georgia.