What is insurer bad faith under O.C.G.A. 33-4-6 in Georgia?
Insurer bad faith under Georgia’s first-party statute refers to an insurance company’s unjustified refusal to pay a valid claim under its own policyholder’s coverage. O.C.G.A. § 33-4-6 creates a penalty for that conduct, on top of the underlying loss, when the refusal is found to lack any reasonable basis.
The core of the statute ¶
Section 33-4-6 applies to first-party claims, meaning disputes between insureds and their own insurers over benefits the policy promises. The statute targets a frivolous or unfounded denial: an insurer that refuses to pay a covered loss without a reasonable ground for doing so can be held liable for more than just the amount it owed in the first place.
When bad faith is established, the statute fixes what the insurer owes beyond the loss itself: a penalty of up to 50 percent of the insurer’s liability for the loss or $5,000, whichever is greater, plus the reasonable attorney’s fees incurred in pursuing the claim. That added exposure is what gives the statute teeth.
Critically, “bad faith” in this context is not mere delay or a mistaken claim decision. It means the insurer had no reasonable justification for refusing to pay. If the insurer had a legitimate, arguable reason to contest the claim, even one that ultimately proves wrong, that generally defeats a bad-faith finding.
The required steps ¶
A first-party bad-faith claim under § 33-4-6 generally depends on three elements:
- A loss that the policy actually covers.
- The insurer’s refusal to pay within 60 days after the policyholder makes a proper demand.
- A finding that the refusal was in bad faith, meaning without reasonable justification.
The 60-day demand is a gateway requirement, not a formality. The policyholder must make the demand and give the insurer that window to pay before the statutory penalty can attach. Notably, paying the claim after the 60-day period has run does not automatically end the bad-faith exposure if the earlier refusal was unjustified.
The bottom line ¶
Under O.C.G.A. § 33-4-6, insurer bad faith is the unreasonable, unjustified refusal to pay a covered first-party loss after a proper 60-day demand. The statute is built to penalize denials that lack any legitimate basis, while leaving room for an insurer to contest genuinely disputable claims without facing a 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.