Can the at-fault driver assign me their bad-faith claim against their own insurer?
In Georgia, the duty an insurer owes to handle settlement reasonably runs to its own policyholder, not to the injured claimant. So when an insurer’s failure to settle leaves the at-fault driver exposed to a judgment above the policy limits, it is the driver who holds the claim against the insurer. That claim can, in appropriate circumstances, be assigned to the injured party.
The claim that gets transferred ¶
Under the failure-to-settle doctrine from Southern General Insurance Co. v. Holt, 262 Ga. 267 (1992), the at-fault driver who is left exposed to an excess judgment holds a claim against their own insurer. Assignment is the legal act that moves that claim to the injured person. An assignment is a transfer of a right from the party who owns it to someone else; here, the driver hands over the right to sue the insurer for the excess.
What the assignment accomplishes is substitution: once it is executed, the injured party steps into the driver’s shoes and may pursue the insurer in the driver’s place. The injured person is no longer suing as a stranger to the policy but as the holder of the insured’s own claim. The recovery sought is the excess judgment the insurer’s refusal to settle produced, the same figure the driver could have pursued.
Why assignments happen ¶
Assignment is a common practical resolution because it aligns everyone’s interests after an excess verdict:
- The at-fault driver wants relief from a personal judgment they cannot pay.
- The injured claimant wants a realistic source of recovery beyond the limited policy.
- Assigning the failure-to-settle claim, often paired with a covenant not to enforce the judgment against the driver personally, can accomplish both.
The viability and structure of any such assignment depend on the specific facts and on Georgia law governing these arrangements, so the precise terms carry significant weight.
The bottom line ¶
Because Georgia’s duty to settle protects the insured rather than the injured claimant, the claim against the at-fault driver’s insurer for an excess judgment belongs to the driver, who may assign it to the injured party. That assignment is what lets the injured person pursue the insurer for the consequences of its unreasonable refusal to settle, subject to how the arrangement is structured under Georgia law.
This article is for general educational and informational purposes only and is not legal advice. It does not create an attorney-client relationship, and Georgia law may change. For advice about a specific situation, consult a licensed Georgia personal injury attorney.