OCGA 9-11-67.1 Georgia Policy Limits Demand Statute
O.C.G.A. § 9-11-67.1
The New Georgia Bad Faith Law
Effective for any injury or death claim flowing from a motor vehicle accident occurring after July 1, 2021 there are serious new requirements for any demand to an insurance company if the demand is for the policy limits. Since 2013, there have been a number of general requirements in effect but abuse by a few lawyers putting in ridiculous clauses and requirements in their letters. So what is required under the new law?
It applies to all ” settlement offers and agreements for personal injury, bodily injury, and
death from motor vehicle, and payment methods,
First we will analyze the changes to the statute itself which appear in BOLD below and discuss what they mean and then we will draft a sample demand letter. You can find a sample bad faith demand letter here.
(a) Prior to the filing of an answer, any offer to settle a tort claim for personal
injury, bodily injury, or death arising from the use of a motor vehicle and prepared by or
with the assistance of an attorney on behalf of a claimant or claimants shall be in writing
(1) Shall contain the following material terms:
(A) The time period within which such offer must be accepted, which shall be not
less than 30 days from receipt of the offer;
(B) Amount of monetary payment;
(C) The party or parties the claimant or claimants will release if such offer is accepted;
(D) For any type of release whether the release is full or limited and an
itemization of what the claimant or claimants will provide to each releasee; and
(E) The claims to be released;
(2) Shall include medical or other records in the offeror’s possession incurred as a result
of the subject claim that are sufficient to allow the recipient to evaluate the claim; and
(This is interesting and will be one of the areas of heavy litigation. Who defines what is “sufficient to allow the recipient to evaluate the claim?” Assume the person dies, it should be sufficient to send the Ambulance record showing deceased but what about sending a surgical OP report but none of the accompanying labs? I would posit that if the medical bills are high enough as compared to the policy limits then it should not matter. We are already seeing insurance carriers thinking this is an absolute safe harbor from Bad Faith. One with a $25,000 policy and $600,000 in emergency room bills declined the policy limits demand and required all of the medical records be sent over. That, in my mind, is text book bad faith. It makes me think of the Will Ferrell Line; “What, I said with all due respect.” As an adjuster, you cannot just throw out “I need more records” and assume it buys you relief from Bad Faith exposure on a time limited demand. And no, it was not in the Geneva Convention.
(3) May include a term requiring that in order to settle the claim the recipient shall
provide the offeror a statement, under oath, regarding whether all liability and casualty
insurance issued by the recipient that provides coverage or that may provide coverage for
the claim at issue has been disclosed to the offeror.
(This is an improvement as we frequently need this to satisfy due diligence that there is no other insurance out there)
(b)(1) Unless otherwise agreed by both the offeror and the recipients in writing, the terms
outlined in subsection (a) of this Code section shall be the only terms which can be
included in an offer to settle made under this Code section.
(This is the big deal. It means lawyers cannot screw around and demand that payment be made on the third Sunday after lent and be delivered by a Greyfriar Monk signing Gregorian Chants.)
(2) The recipients of an offer to settle made under this Code section may accept the same
by providing written acceptance of the material terms outlined in subsection (a) of this
Code section in their entirety.
(c) Nothing in this Code section is intended to prohibit parties from reaching a settlement
agreement in a manner and under terms otherwise agreeable to both the offeror and
recipient of the offer.
(d) Upon receipt of an offer to settle set forth in subsection (a) of this Code section, the
recipients shall have the right to seek clarification regarding the terms, the terms of the
release, liens, subrogation claims, standing to release claims, medical bills, medical
records, and other relevant facts. An attempt to seek reasonable clarification shall be in
writing and shall not be deemed a counteroffer. In addition, if a release is not provided
with an offer to settle, a recipient’s providing of a proposed release shall not be deemed a
(Practice pointer, include your own release. Problem solved.)
(e) An offer to settle made pursuant to this Code section shall be sent by certified mail or
statutory overnight delivery, return receipt requested, and shall specifically reference this
Code section, and shall include an address or a facsimile number or email address to which
a written acceptance pursuant to subsection (b) of this Code section may be provided.
(This eliminates gamesmanship on obscuring how the adjuster is supposed to respond. Many lawyers were just making it hard to deliver the acceptance in a timely fashion.)
(f) The person or entity providing payment to satisfy the material term set forth in
subparagraph (a)(1)(B) of this Code section may elect to
provide payment by any one or more of the following means:
(2) Money order;
(3) Wire transfer;
(4) A cashier’s check issued by a bank or other financial institution;
(5) A draft or bank check issued by an insurance company; or
(6) Electronic funds transfer or other method of electronic payment.
(g) Nothing in this Code section shall prohibit a party making an offer to settle from
requiring payment within a specified period; provided, however, that such date shall not be less
than 40 days from the receipt of the offer.
(h) This Code section shall apply to causes of action for personal injury, bodily injury, and
death arising from the use of a motor vehicle on or after July 1, 2021.”
As with the prior version, the statute does not define “bad faith” or outline what insurance behavior makes negligent claims handling cases. What it does do is say unless this law is complied with, there cannot be bad faith as a matter of law. There can be no “bad faith” or negligence claim for failure to timely pay down the road because the demand has no effect.
When Does it Apply?
- Car wrecks July 1, 2021, and after.
- If Lawyer represented, not to pro se demands.
- Only applies pre-suit. After the Answer is filed, the law does not apply.
- Motor Vehicle Accidents only
- 30-day minimum time to consider the demand.
- Must cite the statute in the demand.
- Open for acceptance in writing; no more saying you can only accept demand by payment.
- Must send by certified mail or statutory overnight delivery, return receipt requested with email to respond to.
- You must offer a release of some type and specify the type of release and the parties to be released. Best practice is to attach your own release.
- The insurer has the right to request more information about:
a. medical liens;
b. subrogation claims by health insurance, workers compensation, Medicare and Medicaid
c. standing to release claims;
d. missing medical bills and missing medical records;
e. other relevant facts.
So What If I Don’t Comply with the Drafting requirements?
Then your demand is incapable of acceptance and the insurance company can not be found to have turned down an offer to settle within policy limits as a matter of law.
- Track this Policy Limits demand.
- Send your draft of the release.
- Be detailed in your records gathering. Any missing records can be a valid reason to stall on paying limits.
- Respond to the adjuster’s requests for additional information in writing. If the request is foolish, politely ask why the information is needed to evaluate the claim.
- Remember every letter and phone call is potentially a jury exhibit.
- Request the payment be made within ten days of acceptance. Failure to pay timely is a denial of the offer to settle. This will be a ripe area for litigation.
DOES IT APPLY TO UM DEMANDS? PROBABLY NOT BECAUSE OF OCGA 33-7-11, BUT I WOULD COMPLY ANYWAY. ONCE ADJUSTERS GET IN THE HABIT OF EXPECTING PRO FORMA DEMANDS, ANYTHING LESS WILL GET IGNORED.
What Does it All Mean?
You can file suit to opt-out, but DO NOT BE AN ASS.
I think a lot of us will file suit so that conventional demands can still be used for cases where the reimbursement scenario is a tangled mess and the limits need to be secured.
The reason we have the legislature paying attention is that some of the Plaintiff’s bar thinks that good practice means getting too cute with demand language traps. If members of the Bar continue to behave that way in litigation, there will be more drastic measures implemented.
Insurance companies don’t need helping screwing up.
- IF YOU WOULD BE EMBARRASSED EXPLAINING YOUR DEMAND TO AN APPELLATE PANEL, DON’T SEND IT.
What Will Insurers Do?
It means we should expect organized form response letters from insurers requesting any missing medical documents. The letters will cite the statute and request documentation and affidavits on
reimbursement claims combined with extensive assurances when it comes to liens.
As a matter of practice, they may begin to ask for certifications of lien information to buy more time. The request for more information is probably waived if the 30 days goes by so expect the requests on a regular basis to cover their rears.
The statute does not address whether the client needs to offer indemnity so that question will remain for the courts. Can we argue that its exclusion from the statute means the legislature did not intend to be so protected?
Lawyer sends totally compliant demand but refuses to indemnify for health insurance subrogation
Carrier refuses to tender limits without the indemnity.
Result? The statute does not speak to this and we are back to arguing before the Appellate Courts.
The mood from the trial and appellate bench is sour on bad faith claims. Judges do not look kindly on simple technical mistakes resulting is massive extra-contractual damages.
- THE PLAINTIFFS BAR NEEDS TO REMEMBER THAT WE NEED TO BE THE GOOD GUYS.
- BE REASONABLE IN YOUR LETTERS.
- RESPOND TO ALL REQUESTS FOR INFORMATION.
- INSURERS WILL STILL DENY VALID CLAIMS WITHOUT YOU BEING A JERK. IT’S IN THEIR NATURE.
These points have been driven home in a 2017 Georgia Supreme Court decision. Grange Mutual Insurance v. Woodward 300 Ga. 838 (2017) is a recent Georgia Supreme Court case that clearly lays out the reality that when you have a car accident injury case that is clearly worth the entire policy and you send a demand in compliance with OCGA 9-11-67.1 and state that payment must be made within ten days in addition to acceptance of the offer within 30 days, the failure to actually make the payment is a denial of the demand. That means that if an insurance carrier accepts the demand but does not pay within the window, they are potentially putting their interests in front of their insured driver and can be financially responsible for the harm that comes to their driver by way of a verdict above the policy limits.
The insurance company in Grange tried to convince the trial court, a Federal Appeals Court and the Georgia Supreme Court that stating that payment must be made within ten days cannot be a condition of acceptance of the offer; that is its minor technicality. Somehow Grange managed to not read the portion of the law that state:
“(g) Nothing in this Code section shall prohibit a party making an offer to settle from requiring payment within a specified period; provided, however, that such period shall be not less than ten days after the written acceptance of the offer to settle.”
The Georgia Supreme Court went on to say that the Plaintiff can make reasonable demands and conditions that the insurer must meet before the offer is accepted. Common requests that we send out include affidavits of no other insurance coverage and affidavits regarding not being on the job at the time of the crash.