Guarantee that insurance companies pay claims to consumers

House Bill 303 provides for increased recovery from the insurance company when the consumer (the insured) experiences damage by an uninsured motorist and the insurance company refuses to pay their claim covered under the law. This new bill would make sure that within 60 days after a written demand is made by the insured, the insurance company must pay the claim. Georgia Watch supports this bill as it ensures that consumers will have their claims paid out with increased efficiency and transparency.

Seeking Damages
Under current law, if the insurance company was found to have refused to pay the insured consumer in bad faith, the insured could recover “not more than 25 percent of the recovery and all reasonable attorney’s fees for the prosecution of the case.” This would not allow the consumer to gain back all of their losses.

In HB 303, the insurance company is liable to the insured consumer for:
(1) damages equal to the policy limits or the balance of the judgment rendered against the uninsured motorist, whichever amount is less (whether payment was denied in bad faith or not);
(2) if the insurer is found to have refused payment to the insured in bad faith, a penalty of $25,000 or 25 percent of the damages (whichever is greater); and
(3) post-judgment interest on the damages, calculated from the date of entry of the judgment against the uninsured motorist.

Attorney Fees
As mentioned, the current law allows for the insured consumer to recover “all reasonable attorney’s fees for the prosecution of the case,” if the insurer refused payment in bad faith.

HB 303 provides that the insured consumer can recover reasonable attorney’s fees and expenses of litigation for the prosecution of the case “in [the court’s] discretion,” and only if the insured prevailed in recovering a penalty against the insurer for denying coverage in bad faith.

Who is Liable?
HB 303 maintains the requirement that the amounts due by the insurance company to the insured consumer be determined in a separate action filed by the insured against the insurer, after a judgment is rendered against the uninsured motorist. HB 303 removes old language about how attorney’s fees should be determined, because fees are now to be determined at the court’s discretion.