What is insurance bad faith in Georgia?

When you buy an insurance policy, you and the insurer enter into a contract. Georgia law does not just enforce the terms of that contract. It also imposes a duty on insurers to handle claims fairly and honestly. When an insurer violates that duty, it may be acting in bad faith.

Georgia recognizes two main categories of insurer bad faith. The first is statutory bad faith under O.C.G.A. Section 33-4-6, which applies when an insurer refuses to pay a covered claim without reasonable cause. If you meet the requirements of that statute, you may be entitled to recover not just the claim amount but also a penalty of up to 50 percent of the loss and reasonable attorney fees. The exact penalty amount is determined by the court or jury and is subject to the facts of each case.

The second category is conduct that violates the Unfair Claims Settlement Practices Act under O.C.G.A. Section 33-6-34. This statute identifies specific behaviors that are prohibited, including failing to adopt reasonable claims investigation standards, failing to acknowledge communications promptly, and offering unreasonably low settlements without adequate investigation. Violations of this statute are enforced by the Georgia Department of Insurance and can result in regulatory action against the insurer.

Bad faith does not mean an insurer made a mistake or reached a different conclusion than you did about the value of a claim. It requires something more: an unreasonable refusal or delay that lacks a legitimate factual or legal basis. Legitimate coverage disputes, even ones you ultimately win, do not automatically constitute bad faith.

If you believe your insurer is handling your claim unfairly, documenting every interaction, saving all correspondence, and consulting with a licensed insurance professional or attorney early in the process gives you the best foundation for any legal or regulatory action.