Georgia Insurance Bad Faith Demand Letter

GEORGIA INSURANCE BAD FAITH DEMAND LETTER

STATUTORY DEMAND PURSUANT TO O.C.G.A. § 33-4-6

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION

DOCUMENT INFORMATION

ADDRESSEE INFORMATION

TO:

SENDER/CLAIMANT INFORMATION

FROM:

CLAIM IDENTIFICATION

I. STATUTORY DEMAND NOTICE

THIS IS A FORMAL DEMAND FOR PAYMENT UNDER O.C.G.A. § 33-4-6

This letter constitutes a formal statutory demand to [INSURANCE COMPANY] ("Insurer" or "Company") on behalf of [INSURED/CLAIMANT NAME] ("Insured" or "Claimant") pursuant to O.C.G.A. § 33-4-6.

CRITICAL NOTICE: Under Georgia law, if Insurer fails to pay this claim within SIXTY (60) DAYS after this demand and it is later determined that such refusal was in bad faith, Insurer shall be liable to pay, in addition to the loss:

1. Up to 50% of the liability or $5,000, whichever is greater, as a penalty; AND
2. All reasonable attorney's fees for the prosecution of the action

This demand must be received more than 60 days before any lawsuit is filed. The 60-day period begins upon Insurer's receipt of this demand.

II. SUMMARY OF DEMAND

TOTAL AMOUNT DEMANDED: $[________________________________]

STATUTORY DEADLINE: Payment must be received within 60 DAYS of Insurer's receipt of this demand.

Deadline Date: [__/__/____]

III. FACTUAL BACKGROUND

A. The Insurance Policy

On or about [__/__/____], Insurer issued Policy No. [________________________________] to Insured, providing coverage for [________________________________]. The policy was in full force and effect at all times relevant to this claim, with all premiums paid current.

Policy Details:

B. The Loss Event

On or about [__/__/____], Insured suffered a covered loss when:

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

Detailed Description of Loss:

1. Date and Time of Loss: [________________________________]

2. Cause of Loss: [________________________________]

3. Nature and Extent of Damage: [________________________________]

4. Emergency Measures Taken: [________________________________]

5. Impact on Insured: [________________________________]

C. Timely Notice and Cooperation

Insured provided timely notice of the loss to Insurer on [__/__/____] by:

☐ Telephone call to claims hotline
☐ Written notice via certified mail
☐ Online claim submission
☐ Agent notification
☐ Other: [________________________________]

Insured has fully cooperated with all reasonable requests, including:

☐ Submission of Proof of Loss on [__/__/____]
☐ Submission of sworn statement in proof of loss on [__/__/____]
☐ Providing recorded statement on [__/__/____]
☐ Providing documentation including:
☐ Photographs of damage
☐ Repair estimates from licensed contractors
☐ Medical records and bills
☐ Police/incident reports
☐ Expert reports
☐ Inventory of damaged property
☐ Financial records/business records
☐ Other: [________________________________]
☐ Permitting inspection of property on [__/__/____]
☐ Examination under oath on [__/__/____]
☐ Additional cooperation: [________________________________]

IV. CLAIM HISTORY AND TIMELINE

The following chronology documents Insurer's handling of this claim:

Total Days Since Notice: [____] days

V. COVERAGE ANALYSIS

A. Applicable Policy Provisions

The Policy provides coverage for the loss at issue:

Insuring Agreement:
[________________________________]
[________________________________]
[________________________________]

Additional Coverages:
[________________________________]
[________________________________]

B. Policy Conditions Satisfied

Insured has satisfied all conditions precedent to coverage:

☐ Timely notice of loss
☐ Submission of proof of loss
☐ Cooperation with investigation
☐ Protection of property from further damage
☐ Submission of documentation
☐ Compliance with examination under oath
☐ Other conditions: [________________________________]

C. Analysis of Exclusions

Exclusion Cited by Insurer (if any): [________________________________]

Reasons Exclusion Does Not Apply:

1. [________________________________]
2. [________________________________]
3. [________________________________]

D. Coverage Conclusion

Based on the Policy language and Georgia law, the loss is covered. Insurer has no legitimate or arguable basis for denying or underpaying this claim. Any refusal to pay constitutes bad faith under O.C.G.A. § 33-4-6.

VI. IDENTIFICATION OF BAD FAITH CONDUCT

A. No Reasonable Basis for Denial/Delay

Under O.C.G.A. § 33-4-6, "bad faith" means a "frivolous and unfounded refusal to pay a claim." United States Fid. & Guar. Co. v. Biddy Lumber Co., 114 Ga. App. 358 (1966).

A defense must go "far enough to show reasonable and probable cause for making it" to vindicate the insurer's good faith. Insurer's conduct here demonstrates no such reasonable or probable cause:

☐ Denial without investigation: Insurer denied the claim without conducting a reasonable investigation

• Specific conduct: [________________________________]

☐ Denial without basis: Insurer denied the claim citing exclusions or defenses that clearly do not apply

• Specific conduct: [________________________________]

☐ Unreasonable delay: Insurer has unreasonably delayed investigating or paying the claim

• Specific conduct: [________________________________]

☐ Misrepresentation: Insurer misrepresented policy provisions or the law

• Specific conduct: [________________________________]

☐ Lowball offer: Insurer offered substantially less than clearly owed

• Amount offered: $[________________________________]
• Amount actually owed: $[________________________________]
• Shortfall: $[________________________________]

☐ Failure to communicate: Insurer failed to respond to communications

• Dates of unanswered communications: [________________________________]

☐ Other bad faith conduct: [________________________________]

B. Unfair Claims Settlement Practices (O.C.G.A. § 33-6-34)

Insurer's conduct also violates Georgia's unfair claims settlement practices statute:

☐ Misrepresenting pertinent facts or policy provisions
☐ Failing to acknowledge claims promptly
☐ Failing to adopt reasonable standards for investigation
☐ Refusing to pay without reasonable investigation
☐ Failing to affirm or deny coverage within reasonable time
☐ Not attempting good faith settlement when liability is clear
☐ Compelling litigation by offering substantially less than owed
☐ Other: [________________________________]

VII. LEGAL FRAMEWORK – GEORGIA BAD FAITH LAW

A. O.C.G.A. § 33-4-6 – Bad Faith Penalty Statute

Georgia's bad faith statute provides:

"In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action against the insurer."

Key Requirements:

1. A loss covered by the policy
2. A demand made by the policyholder
3. Refusal to pay within 60 days after demand
4. A finding that the refusal was in bad faith

Definition of Bad Faith: "A frivolous and unfounded refusal to pay a claim." If the insurer has any "reasonable ground to contest the claim," penalties are not authorized. Haezebrouck v. State Farm Mut. Auto. Ins. Co., 290 Ga. App. 420 (2008).

B. O.C.G.A. § 33-7-11 – UM/UIM Bad Faith (If Applicable)

For uninsured/underinsured motorist claims, O.C.G.A. § 33-7-11 provides:

• 25% penalty on the amount of recovery, subject to a $25,000 minimum floor; plus
• All reasonable attorney's fees

☐ This claim involves UM/UIM coverage and § 33-7-11 applies

C. Exclusive Remedy Rule

Under Georgia law, O.C.G.A. § 33-4-6 is the exclusive remedy for bad faith denial of insurance benefits in first-party disputes. United States Automobile Association v. Carroll, 226 Ga. App. 144 (1997). Litigation expenses under O.C.G.A. § 13-6-11 are not separately recoverable.

D. Key Georgia Bad Faith Case Law

1. National Security Fire & Casualty Co. v. Bowen, 447 So.2d 133 (Ala. 1983) – Note: This is an Alabama case (So.2d is the Southern Reporter, covering Alabama, not Georgia). Frequently cited for bad faith elements but is not Georgia case law. Included here for reference only; Georgia practitioners should rely on the Georgia authorities below.

2. Colonial Life & Acc. Ins. Co. v. Collins, 194 Ga. App. 825 (1990) – Common law bad faith for intentional, egregious conduct.

3. United States Fid. & Guar. Co. v. Biddy Lumber Co., 114 Ga. App. 358 (1966) – Definition of bad faith as frivolous and unfounded refusal.

4. Cagle v. State Farm Fire & Cas. Co., 236 Ga. App. 726 (1999) – Demand must be made more than 60 days before filing suit.

5. Atlantic Title Ins. Co. v. Aegis Funding Corp., 287 Ga. App. 392 (2007) – Bad faith found where insurer failed to pay until after protracted litigation.

6. Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683 (2003) – Insurer must have reasonable and probable cause for denial.

7. Haezebrouck v. State Farm Mut. Auto. Ins. Co., 290 Ga. App. 420 (2008) – Reasonable ground to contest defeats bad faith claim.

VIII. DAMAGES

A. Contract Damages (Policy Benefits Owed)

B. Statutory Bad Faith Penalty (If Not Paid Within 60 Days)

Under O.C.G.A. § 33-4-6:

C. Attorney's Fees (If Bad Faith Found)

Under O.C.G.A. § 33-4-6, all reasonable attorney's fees for prosecution of the action are recoverable:

Note: Attorney's fees are determined by the trial jury based on competent expert evidence as to the reasonable value of services.

D. Summary of Potential Damages

IX. SETTLEMENT DEMAND

A. Time-Limited Settlement Offer

THIS IS A FORMAL DEMAND UNDER O.C.G.A. § 33-4-6

Insured hereby demands that Insurer pay the sum of $[________________________________] within SIXTY (60) DAYS of receipt of this letter.

This demand represents the loss amount owed under the Policy. Payment within 60 days will resolve this matter without statutory penalties or attorney's fees.

B. Payment Instructions

Payment must be:

1. Made payable to: [________________________________]
2. Delivered to: [________________________________]
3. Received no later than: [__/__/____] (60 days from receipt of this demand)

C. Settlement Without Penalty

If Insurer pays the full loss amount of $[________________________________] within 60 days:

• No bad faith penalty will be sought
• No attorney's fees will be sought
• Insured will execute a general release of all claims

D. Consequences of Failure to Pay Within 60 Days

IF INSURER FAILS TO PAY WITHIN 60 DAYS OF RECEIPT OF THIS DEMAND:

1. Insured will file suit in [________________________________] County, Georgia

2. Insured will seek:
   - All contract damages (loss amount)
   - 50% bad faith penalty under O.C.G.A. § 33-4-6
   - All reasonable attorney's fees
   - Pre- and post-judgment interest
   - Costs of suit

3. This demand letter will be introduced as evidence to establish:
   - The statutory demand was made
   - Insurer had 60 days to pay
   - Insurer refused to pay without legitimate basis

X. COMMISSIONER NOTIFICATION

Pursuant to O.C.G.A. § 33-4-6(b), within 20 days after service of any action against Insurer seeking bad faith penalties, a copy of the action must be mailed to:

Georgia Insurance Commissioner
Office of Commissioner of Insurance
2 Martin Luther King Jr. Drive
Floyd Memorial Building, West Tower, Suite 704
Atlanta, Georgia 30334

AND

Georgia Consumers' Insurance Advocate
Office of Consumer Services
2 Martin Luther King Jr. Drive
Floyd Memorial Building, West Tower, Suite 716
Atlanta, Georgia 30334

Insured intends to comply with these notification requirements if litigation becomes necessary.

XI. PRESERVATION OF EVIDENCE

LITIGATION HOLD NOTICE

Insurer is hereby directed to immediately implement a litigation hold and preserve all documents, communications, and electronically stored information ("ESI") related to this claim:

☐ Complete claim file, including all versions
☐ All internal communications (emails, instant messages, memoranda)
☐ All communications with Insured
☐ All communications with vendors, consultants, or experts
☐ Adjuster notes, diaries, and activity logs
☐ Photographs, videos, and inspection reports
☐ Expert reports and correspondence
☐ Reserve information and reserve history
☐ Underwriting file
☐ Training materials and claims handling manuals
☐ Similar claims data
☐ Metadata for all electronic documents
☐ Backup tapes and archived data
☐ Audio recordings of calls

SPOLIATION WARNING: Failure to preserve evidence may result in adverse inference instructions and sanctions under Georgia law.

XII. CONCLUSION

Insurer's refusal to pay this covered loss lacks any reasonable or arguable basis. This demand provides Insurer with a statutory opportunity to pay within 60 days and avoid bad faith penalties and attorney's fees.

The evidence demonstrates:

1. A valid insurance policy in effect at the time of loss
2. A covered loss
3. Full compliance with policy conditions
4. Insurer's refusal without legitimate or arguable reason
5. This formal statutory demand

Failure to pay within 60 days will result in immediate litigation seeking the loss amount plus 50% penalty plus all attorney's fees under O.C.G.A. § 33-4-6.

SIGNATURE AND CERTIFICATION

I certify that the statements made in this demand letter are true and correct to the best of my knowledge and belief.

Insured/Claimant:

Signature: _______________________________________________

Print Name: [________________________________]

Date: [__/__/____]

Attorney for Insured (if applicable):

Signature: _______________________________________________

Print Name: [________________________________]

Georgia Bar No.: [________________________________]

Firm: [________________________________]

Address: [________________________________]

Phone: [________________________________]

Email: [________________________________]

Date: [__/__/____]

METHOD OF DELIVERY

IMPORTANT: This demand must be sent in a manner that provides proof of Insurer's receipt to establish the start of the 60-day period.

This demand letter was sent via:

☐ Certified Mail, Return Receipt Requested
Tracking No.: [________________________________]

☐ FedEx/UPS Overnight Delivery
Tracking No.: [________________________________]

☐ Hand Delivery
Delivered by: [________________________________]
Date/Time: [________________________________]

☐ Email (with delivery/read receipt)
Sent to: [________________________________]
Date/Time: [________________________________]

EXHIBITS AND ATTACHMENTS

☐ Exhibit A: Insurance Policy (Declarations Page and Relevant Provisions)
☐ Exhibit B: Proof of Loss Documentation
☐ Exhibit C: Photographs/Videos of Damage
☐ Exhibit D: Repair Estimates/Contractor Quotes
☐ Exhibit E: Correspondence with Insurer
☐ Exhibit F: Denial/Underpayment Letter(s)
☐ Exhibit G: Expert Reports
☐ Exhibit H: Medical Records/Bills (if applicable)
☐ Exhibit I: Property Inventory and Valuation
☐ Exhibit J: Damage Calculation Spreadsheet
☐ Exhibit K: [________________________________]

This demand letter is intended to preserve all rights of the Insured under Georgia law and shall not be construed as a waiver of any claims or remedies. All rights are expressly reserved.

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED