Georgia automobile insurance law is constantly in a state of change. The Georgia General Assembly tweaks the auto insurance law every year. This year the major change that is brewing is the change to time limited demands for the limits of an insurance policy. This is an extremely important change for both those who are insured and those who are making claims against an insurance company. When someone is seriously injured by the fault of another driver, the at fault driver’s liability insurance is often the only source of compensation. When that insurance policy is insufficient, we look to the injured party’s uninsured motorist coverage. When there is no uninsured motorist coverage, then we’re stuck with the limits of the liability policy.
Under Georgia law, when the injured party demands that the at fault party’s insurance company pay the limits of their policy, the insurance company has a duty to pay those limits if the nature of the injuries and damages justify such payment. Demands such as these are often time limited because the injured party needs the compensation as soon as possible to avoid financial disaster or to pay for future medical treatment. The question is this: what motivates the at fault party’s insurance company to pay its limits as compensation for serious injuries? The answer is this: the at fault party’s insurance company is only motivated by the risk of having to pay more than its limits. That risk occurs when the insurance company fails to timely pay its limits in response to a time limited demand.
For example, let’s take a child who is injured by a neighbor backing out of the child’s driveway, and the neighbor was aware that the child was playing outside but failed to look for the child while backing up. The child has serious injuries that require a hospital stay of 5 days and the bill is $37,000. Unfortunately, the neighbor only had the minimum limits in required in Georgia, $25,000, and this is the only source of potential compensation. Obviously, the policy limit is insufficient to fully compensate the family in this case. A demand is made on behalf of the child for the limits of the insurance policy, and a time limit of 30 days is provided to the insurer to pay the limits. In such a case, if the insurer failed to pay the limits within the 30 days, and the child’s family later obtained a verdict in court against the neighbor for $100,000, the neighbor’s insurance company could be held to pay the entire $100,000 verdict, as well as the family’s attorney’s fees. While this is a simplified example of what is often a much more complex situation, hopefully this helps you understand the dynamics involved. In particular, it helps explain what motivates the insurer to settle cases when their limits are insufficient.
The insurance law bill that is currently being debated is attempting to create clearer guidelines for insurers and claimants related to time limited demands for policy limits. The constantly changing case law and Georgia statutes require vigilant lawyer to constantly keep themselves updated on the changes. While there are simple, cut and dried cases, every auto accident involves the application of auto insurance law. If you are reading this and you are looking for a lawyer to help you or your family concerning an automobile accident claim, it is important to recognize that automobile insurance law is a subspecialty that is not thoroughly understood by most lawyers. You need a lawyer who has substantial experience and whose primary focus is in this area of law.
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