Should You Sue Your Own Insurance Company?

When Your Own Insurance Company Turns Against You

pd2​We tell people involved in Atlanta car accidents that as attorneys, we feel the most important insurance coverage you can get is uninsured/underinsured motorist coverage (UM) through your own car insurance company. This is the coverage that kicks in to protect you when you are injured in a crash caused by someone who doesn’t carry liability insurance at all or they simply don’t have enough insurance coverage to pay for the harms they have caused. In Georgia, many drivers carry the minimum limits of liability insurance mandated by law- $25,000. If you are involved in a crash and suffer any kind of significant injury, that amount of money will likely not even cover the medical bills you incur for your medical treatment. Because the drivers who carry the minimum limits of insurance are usually the ones who cause most of the car wrecks in our state (there’s a reason why they can’t get better insurance), UM coverage is a must.

​But what happens when your own car insurance company doesn’t treat you fairly and refuses to compensate you for the damages you’ve suffered? Unfortunately, many injured victims in Georgia learn the hard way that their insurance company is happy to accept their premiums for UM coverage over many years, but when the time comes to pay out on legitimate claims, they are in for a serious fight. For instance, in one of our recent cases, the liability carrier for the at-fault driver was quick to pay our client the limits of their policy, but when it came time to pursue the money available under our client’s UM policy, her insurance company refused to negotiate after presenting her with a low-ball offer, forced us to file a law suit to protect her rights, and then failed to have an attorney present for important legal proceedings.

​One of the primary reasons UM carriers are able to get away with treating their own customers this way is the simple fact that the penalties for stubborn litigiousness or bad conduct in negotiation or litigation are not nearly as severe for UM carriers as compared to liability carriers. Insurance companies representing the at-fault party can face harsh sanctions if they refuse to act in good faith or negligently fail to settle a case that is clearly worth more than the limits of their insured’s policy. On the other hand, the “bad faith” penalties for UM carriers in Georgia, codified at O.C.G.A § 33-7-11(j), are not as harsh and present less of an incentive for UM carriers to refrain from treating their own customers with such disregard.

​In an attempt to remedy this situation, the Georgia General Assembly has recently been looking at ways to impose stricter penalties on insurance companies that behave in this manner toward their own customers. While the bill considered in this year’s legislative session was not able to pass through the House and Senate, we are hopeful that our legislators will continue to consider this important issue next January when the members under the Gold Dome reconvene for the 2016 session. Until then, Georgia consumers should be wary when they are forced to pursue a claim under their own UM coverage.​