Does the bad-faith penalty apply to my own UM insurer in Georgia?

· 3 min read

A claim against an injured person’s own uninsured/underinsured motorist (UM) carrier is a first-party claim, and Georgia attaches a bad-faith penalty to it. The controlling provision is not the general first-party statute, however, but the UM-specific subsection O.C.G.A. § 33-7-11(j). When a UM insurer refuses without reasonable justification to pay benefits its policyholder is owed, that subsection is the tool for seeking a penalty and fees.

First-party coverage, first-party rules

UM coverage protects the insured against losses caused by an uninsured or underinsured driver. Because the insured is making a claim under their own policy, the relationship is between policyholder and their own insurer, which is the hallmark of a first-party claim. That posture is why a dedicated penalty exists: while § 33-4-6 covers first-party losses generally, the legislature wrote § 33-7-11(j) specifically for a UM carrier’s refusal to pay its own insured, as opposed to disputes over a liability insurer’s handling of a claim brought by an injured stranger.

So when a UM carrier denies or refuses to pay valid UM benefits, the policyholder is in the kind of insurer-versus-insured posture this UM bad-faith penalty was written to police.

The same conditions still apply

Pursuing a penalty against a UM carrier does not relax the statute’s requirements. The same elements that govern any first-party bad-faith claim apply here:

  • The UM coverage must actually owe the benefits at issue.
  • The policyholder must make a demand and give the insurer 60 days to pay.
  • The refusal must be without reasonable justification, not merely a good-faith dispute.

A UM carrier frequently has legitimate reasons to contest a claim, such as a genuine dispute over the at-fault driver’s liability, the extent of the injuries, or whether the other driver was truly underinsured. Where such a real dispute exists, the reasonable-justification defense can defeat the penalty just as it would in any other first-party case.

One practical wrinkle is unique to UM bad faith: § 33-7-11(j) is generally read to contemplate two proceedings, one fixing the at-fault driver’s liability and the resulting recovery, and a separate finding of bad faith against the UM carrier. The penalty itself is also calibrated differently from the general statute. A successful claimant may recover up to 25 percent of the UM recovery or $25,000, whichever is greater, plus reasonable attorney’s fees, rather than the smaller percentage cap that applies to ordinary first-party losses.

The bottom line

Because a UM claim is a first-party claim against one’s own insurer, a bad-faith penalty does reach a UM carrier’s unjustified refusal to pay, but the operative statute is O.C.G.A. § 33-7-11(j) rather than the general § 33-4-6. The policyholder must still satisfy the coverage, 60-day demand, and unreasonableness requirements, and a UM insurer with a genuine basis to dispute liability, damages, or underinsurance can still avoid the penalty.

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.

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