What Can I Do If My Auto Insurance Refuses To Pay A Third-Party Claim?
Each year, we pay our auto insurance carriers thousands of dollars of liability insurance premiums to protect us in the event that we accidentally cause harm to another driver or pedestrian. We rightfully expect that our auto insurance carriers will put our interests first – not their own – when they evaluate a third party liability insurance claim filed by the individual that we accidentally injured.
In other words, if you purchased $25,000 of liability insurance coverage and the injured victim’s claim is worth $25,000, you should expect your liability insurance company to pay that claim in full. If your liability insurance company doesn’t pay that third-party claim, the injured victim might sue you and seek to recover an excess verdict against you. An “excess verdict” means that there wasn’t enough liability insurance coverage to pay the verdict, such that the policyholder (you) is responsible for paying the balance of the verdict. If the injured victim obtains an excess verdict against you, he or she might be able to seize your assets, garnish your wages, and/or file a lien on your home.
Unfortunately, many auto insurance companies routinely refuse to settle third party liability insurance claims for their fair value. Why? To save their own money – not yours. You see, each month when the insurance company receives your premium, they deposit it into an account that is invested in the stock market. The longer that your money remains invested in the stock market, the more interest that the insurance company earns on your money.
If your insurance company agrees to pay a third party claim, the settlement funds come from the pool of insurance money that your insurer would have otherwise invested in the stock market. The insurance company knows that it will eventually have to pay a valid claim. Indeed, if the third party claim proceeds to trial, a reasonable jury will demand that they pay it. However, many insurance companies drag out the claims process so that they can earn the greatest amount of interest on their policyholders’ premiums. Unfortunately, that means that more often than not, they will expose the policyholder (you) to the risk of an excess verdict.
Fortunately, Georgia has enacted a law that is designed to protect auto liability insurance policyholders if they are abused by their liability insurance carriers. Georgia Code § 9-11-67.1 provides that if an injury victim makes a pre-lawsuit settlement offer to resolve his or her claim, your liability insurance company has 30 days to evaluate that offer and decide whether to pay it. If the claimant’s offer is reasonable, your liability insurance company must pay it. If they don’t and the claimant proceeds to sue you and achieves an excess verdict against you, you can actually turn around and sue your own liability insurance company for negotiating the claim in “bad faith” and exposing you to an excess verdict.
If an injured victim sued you and obtained an excess verdict against you, you should immediately contact the Atlanta accident attorneys at Allen & Scofield Injury Lawyers, LLC. Over the course of the past few years, we have successfully resolved many cases in which liability insurance companies failed to negotiate third-party claims in good faith and exposed their policyholders to potential excess verdicts.
What Damages Can I Recover If My Auto Insurance Refused to Pay a Third-Party Claim?
If your auto liability insurance carrier refused to pay a third party claim and the claimant subsequently obtained a million dollar excess verdict against you, the harms that you will likely suffer are immense. You might have to file bankruptcy. Your credit might be destroyed. The court might garnish your wages or order the sale of your assets. The claimant might file a lien against all of your property which would prevent you from selling any property without first paying off the lien.
Fortunately, the bad faith penalties for your insurance carrier’s misconduct are as plentiful as they are fair. For instance, you can sue your liability insurance carrier and potentially recover the follows types of compensation for your losses:
- Damages equal to the amount by which the judgement exceeds policy coverage.
- Post-judgment interest.
- Compensation for reputational damage, e.g. if your business interests or your reputation were harmed by having a judgment of record filed against you.
- Compensation for mental or psychological injuries that you suffered from having to endure years of litigation, post-judgment discovery and collection efforts, damaged credit, and lost assets, to name a few harms.
- Uncapped punitive damages.
- Reimbursement for your attorneys’ fees and costs.
Can I Urge My Insurance Carrier To Pay A Third-Party Claim?
Most people prefer to live in peace and avoid personal injury lawsuits. They don’t want to be sued by injured victims. They also don’t want to spend years suing their own liability insurance carrier for exposing them to an excess verdict.
If an injured victim sends a pre-lawsuit settlement demand to your liability insurance company, your company should provide you with a copy of that demand or at least notify you that a demand has been made. At that point, you have the right to urge your liability insurance carrier to pay the victim’s demand. Although your insurance premiums will likely increase if your insurance carrier pays the demand, that’s a much better result than being caught up in a multi-year lawsuit that might expose you to a million dollar excess verdict.
You also have the right to retain a personal attorney to advise you about the risk of personal exposure above any liability insurance coverage that you purchased. Remember, your liability insurance company does what’s in their best interest, not yours. If you hire a personal attorney, your attorney might be able to persuade the insurance company to pay the claimant’s demand. If your liability insurance company still refuses to pay the demand after your attorney explains why that will harm you, then you have even more evidence to prove that your carrier refused to negotiate in good faith.
Allen & Scofield Injury Lawyers, LLC Can Help
The attorneys at Allen & Scofield Injury Lawyers, LLC have recovered of millions of dollars from auto liability insurance companies that acted in bad faith by refusing to accept an injured victim’s settlement offer. Although it’s devastating when your liability insurance company acts recklessly and exposes you to a bad faith verdict, the law is on your side. Your liability insurance company burned you once. We won’t let them burn you twice.