Georgia Practice: Worked Cases

Applying Georgia rules to real situations

Each case below starts from a familiar policy concept, such as cancellation, a binder, uninsured motorists coverage or a workers’ compensation claim, and works through the Georgia statute or rule that decides the outcome, one step at a time. Days are calendar days unless a rule says otherwise.

Case 1: A homeowners policy canceled midterm (O.C.G.A. §§ 33-24-44, 33-24-46)

The Okafors’ homeowners policy took effect January 15. In August, an inspection shows they have turned their detached garage into a woodworking business with industrial saws and a spray-finishing booth. The insurer also notes two wind claims in the past three years. On September 1 it wants to end the policy.

1. Find the rule. Georgia’s property cancellation statute governs policies insuring natural persons against direct loss to residential real property and its contents (O.C.G.A. § 33-24-46(a)), which includes the Okafors’ homeowners policy.
2. Check the reason. After 60 days in force, the policy may be canceled only for nonpayment; fraud, concealment or material misrepresentation; a change in the risk that substantially increases a hazard insured against; or violation of a material policy term (O.C.G.A. § 33-24-46(c)(2)). Claims history is not on the list. The commercial shop, with its saws and finishing booth, is a change in the risk that substantially increases the fire hazard.
3. Give proper notice. Written notice stating the effective date must allow at least 30 days from mailing or delivery. It goes by at least first-class mail to the last address of record of the Okafors and their mortgage lender, with Postal Service evidence of mailing, or in person (O.C.G.A. §§ 33-24-44(b), 33-24-46(c)(1)). Mailed September 1, it can take effect no earlier than October 1.
4. State the reasons. A cancellation for a reason other than nonpayment is a termination, an adverse underwriting decision, so the insurer gives the specific reasons in writing or tells the Okafors they may have them on written request (O.C.G.A. §§ 33-24-46(c)(1), 33-39-3(1)(A)(ii), (24), 33-39-11(a)).
5. Point to the FAIR Plan. Because the cancellation is not for nonpayment, the notice must tell the Okafors they may be eligible for the Georgia FAIR Plan and give its address (O.C.G.A. § 33-24-46(e)).
6. Refund the premium. Unearned premium is refunded pro rata, with the notice or by the cancellation date, to the Okafors or their agent of record. An agent who receives it must pass it on within ten working days of receiving it or of the insurer’s notice of the amount, or by the cancellation date, whichever is later (O.C.G.A. §§ 33-24-44(c)(1), 33-24-46(g)). An insurer or agent who fails to return it owes a statutory penalty and interest (O.C.G.A. § 33-24-44(c)(3)).

Result. The insurer may cancel effective October 1 or later for the change in risk. The wind claims could not support a cancellation, nor a nonrenewal: an insurer may not refuse to renew for two or fewer claims in the preceding 36 months not attributable to the negligent or intentional acts of the insured or household members (O.C.G.A. § 33-24-46(j)(3)). For nonpayment, or for a policy in force fewer than 60 days, ten days’ notice would have sufficed (O.C.G.A. § 33-24-44(d)).

Case 2: From nonrenewal to the FAIR Plan (O.C.G.A. §§ 33-24-46, 33-33-1 through 33-33-7)

Ms. Reyes owns a 1920s frame house with original wiring and an aging roof. Her insurer decides not to renew her homeowners policy, and no other insurer her agent represents will write it.

1. Nonrenewal notice. The insurer must mail or deliver written notice at least 60 days before the nonrenewal takes effect, with its reasons and with the FAIR Plan notice and address (O.C.G.A. § 33-24-46(d)(1), (e)).
2. Her challenge route. To claim the nonrenewal is unlawful, she must file a written notice with the insurer, saying how, before it takes effect, or lose the claim (O.C.G.A. § 33-24-46(l)). The Commissioner-review procedure with its 15-day request window applies to auto and motorcycle policies, not homeowners (O.C.G.A. § 33-24-45(a), (o); Ga. Comp. R. & Regs. r. 120-2-53-.02).
3. The FAIR Plan. Every insurer writing property insurance in Georgia must belong to the FAIR Plan and its underwriting association as a condition of doing property business, sharing its writings and losses in proportion to its own premiums (O.C.G.A. § 33-33-3). The association issues policies on its members’ behalf under a plan, approved by the Commissioner, that sets the perils covered and the areas served (O.C.G.A. §§ 33-33-2, 33-33-4). Her agent applies there.
4. Inspection. If the association inspects the house, no suit arises from the inspection or statements about the property, and the reports are not public documents (O.C.G.A. § 33-33-6).
5. If the Plan says no. She may appeal any action or decision of the Plan, the association or a participating insurer to the Commissioner within 30 days; the Commissioner holds a hearing and issues an order (O.C.G.A. § 33-33-7).
6. Privacy rights. Her agent’s placement of a nonrenewed client with a market she accepts is not an adverse underwriting decision, but the agent must still give the specific reasons for it (O.C.G.A. § 33-39-3(1)(B)(iv)). The FAIR association, an association of insurers that underwrites jointly, is a residual market mechanism under the privacy chapter (O.C.G.A. §§ 33-33-2, 33-9-10, 33-39-3(23)). A later insurer may ask about her FAIR Plan coverage only if it also asks why she had it, and may not base an adverse underwriting decision on that fact alone (O.C.G.A. §§ 33-39-12, 33-39-13(a)(1)).

Result. Ms. Reyes keeps continuous coverage through the residual market, with a 30-day appeal if the Plan acts against her.

Case 3: A disputed binder (O.C.G.A. § 33-24-33)

On June 1, an agent tells Daniel by telephone that the house he has just bought is covered as of that day under the insurer’s homeowners form. The written policy is delayed in underwriting.

1. Is a phone binder valid? Yes. A binder may be oral or written and includes all the usual terms of the policy it was given for, plus endorsements it designates, unless its clear terms say otherwise (O.C.G.A. § 33-24-33(a)).
2. A fire on July 20. The binder is in force, so the loss is covered on the homeowners form’s terms, including its deductible, conditions and exclusions.
3. How long it lasts. A binder is valid no longer than the issuance of the policy or 90 days from its effective date, whichever is shorter (O.C.G.A. § 33-24-33(b)). Ninety days from June 1 runs to August 30.
4. A windstorm on September 10, still no policy. The binder lapsed after August 30 unless it was extended or renewed with the Commissioner’s written approval or under the Commissioner’s rules (O.C.G.A. § 33-24-33(c)).
5. No consideration. If a binder is void from the start for failure of consideration, Georgia’s cancellation-notice requirements do not apply to it (O.C.G.A. § 33-24-44(d.1)).

Result. The July fire is covered on the policy’s terms; the September windstorm is not covered by the binder unless the Commissioner approved an extension. The 90-day limit does not apply to excess or surplus lines insurance (O.C.G.A. § 33-24-33(b)).

Case 4: An auto physical damage claim on the clock (Ga. Comp. R. & Regs. r. 120-2-52)

Tanya’s car is damaged in a collision. She reports the claim to her agent on April 2 and returns the insurer’s completed proof of loss on April 20. The insurer’s estimate is $4,100; her body shop’s written estimate is $5,300. The car was worth $9,000 before the loss.

1. The clock starts at the agent. Notice to the insurer’s agent is notice to the insurer (r. 120-2-52-.03(1)).
2. Acknowledgment. By April 17, 15 days after notice, the insurer must acknowledge the claim or send the proof of loss forms, which counts as acknowledgment (r. 120-2-52-.03(1), (2)).
3. Decision. It must affirm or deny liability within 15 days of the completed proof of loss, by May 5 (r. 120-2-52-.03(3)). If it needs more time, it must tell Tanya why, with an estimate, within 5 business days after May 5, and may not go past 60 days from April 2, June 1, unless the file documents information it requested and has not received (r. 120-2-52-.03(5)).
4. The estimate dispute. Within 15 days of receiving her shop’s higher written estimate, the insurer must name a shop that will do the work for $4,100 or pay the difference (r. 120-2-52-.04(1)). Tanya may still use her own shop and pay any difference (r. 120-2-52-.03(8)).
5. Depreciation. The insurer proposes deducting $1,500 for rust. A wear-and-tear or rust deduction is capped at $1,000, and all such deductions together at 20% of the $9,000 pre-loss value, or $1,800 (r. 120-2-52-.04(2)).
6. Payment. Once coverage is confirmed and the amount is undisputed, payment is due within 10 days (r. 120-2-52-.03(4)), and the check may not be labeled final unless the limit was paid or a compromise was agreed (O.C.G.A. § 33-6-34(13)).

Result. If the amount is still disputed after liability is accepted, either side may ask the Commissioner in writing for arbitration (r. 120-2-52-.03(6)).

Case 5: A homeowners claim that stalls (O.C.G.A. §§ 33-6-34, 33-4-6)

A kitchen fire damages the Bells’ home. In June the adjuster agrees the loss is covered and that $38,000 is owed, then stops returning calls. No payment arrives.

1. Name the practices. Failing to acknowledge pertinent communications with reasonable promptness, and failing to attempt a prompt, fair settlement once liability is reasonably clear, are unfair claims settlement practices (O.C.G.A. § 33-6-34(2), (4)). They violate the Act only if flagrant and in conscious disregard of the law or a general business practice (O.C.G.A. § 33-6-33), and the Act gives the Bells no right to sue (O.C.G.A. § 33-6-37).
2. Write it down. The Bells’ agent helps them ask in writing for the insurer’s coverage decision, which it must then give within a reasonable time after completing its investigation (O.C.G.A. § 33-6-34(7)).
3. Complain. A written complaint to the Commissioner’s office starts an investigation, made regardless of amount, in which the staff reviews the loss estimates in a fire claim and tells the policyholder its view (Ga. Comp. R. & Regs. r. 120-2-2-.65(1), (5), (7)).
4. Demand payment. On July 10 the Bells, as holders of the policy, demand payment. The insurer has 60 days, to September 8 (O.C.G.A. § 33-4-6(a)).
5. Compute the exposure. If it has not paid by September 8 and the refusal is found to be in bad faith, it owes the $38,000 plus up to the greater of 50 percent of its liability, $19,000, or $5,000, so up to $19,000, plus reasonable attorney’s fees (O.C.G.A. § 33-4-6(a)).
6. Late payment. Paying on September 20 does not end the bad-faith action (O.C.G.A. § 33-4-6(a)). If the Bells sue, they mail the Commissioner their demand and complaint within 20 days of filing (O.C.G.A. § 33-4-6(b)).

Result. The complaint brings regulatory pressure; the 60-day demand creates the Bells’ own right to a penalty.

Case 6: A third-party property damage demand (O.C.G.A. § 33-4-7)

Jenna backs into Marcus’s parked SUV. Her auto liability insurer accepts fault but offers $5,500. Marcus’s body shop estimates $8,000. His attorney sends the insurer, by certified mail with return receipt requested, a letter offering to settle for $8,000; it arrives May 1.

1. The duty applies. The loss is property damage covered by a motor vehicle liability policy, so the insurer must adjust it fairly and promptly and, with liability reasonably clear, try in good faith to settle (O.C.G.A. § 33-4-7(a)).
2. The demand qualifies. Certified mail, return receipt requested, offering to settle for an amount certain (O.C.G.A. § 33-4-7(c)).
3. The 60 days. The insurer has until June 30 and does not accept. Marcus sues Jenna and, after the 60 days, serves the insurer (O.C.G.A. § 33-4-7(c), (d)). Within 20 days of bringing the action he mails the Commissioner the demand and complaint (O.C.G.A. § 33-4-7(g)).
4. Trial. The insurer is an unnamed party, not disclosed to the jury. The jury awards $9,000, more than the demand, so the trial resumes on bad faith (O.C.G.A. § 33-4-7(d)).
5. The penalty. If bad faith is found, the insurer owes up to the greater of 50 percent of Jenna’s liability, $4,500, or $5,000, so up to $5,000, plus reasonable attorney’s fees, in a separate judgment (O.C.G.A. § 33-4-7(a), (f)). Paying after June 30 would not have ended the action (O.C.G.A. § 33-4-7(e)).

Result. Had the insurer accepted by June 30, or had the jury awarded less than $8,000, no penalty would apply. Nor would this statute reach an injury claim: it covers loss “because of injury to or destruction of property” (O.C.G.A. § 33-4-7(a)).

Case 7: An uninsured motorist claim (O.C.G.A. §§ 33-7-11, 33-24-41.1)

Tom runs a red light and injures Priya. Tom’s liability limit is $25,000 per person. Priya’s policy has UM limits of $100,000 per person; she never rejected UM in writing or selected the reduced option in writing. Her losses total $150,000.

1. UM applies. UM coverage applies unless an insured named in the policy rejects it in writing. Its limits are at the insured’s option: at least $25,000 per person, $50,000 per accident and $25,000 property damage, or equal to the policy’s liability limits, or an amount below those liability limits that the insured affirmatively chooses (O.C.G.A. § 33-7-11(a)(1), (3)).
2. Is Tom “uninsured”? Because Priya carries UM, Tom’s car is treated as uninsured to the full extent of her UM limits, and her UM pays in addition to his liability coverage, so long as her combined recovery does not exceed her total losses (O.C.G.A. § 33-7-11(b)(1)(D)(ii)(I)).
3. Settle with Tom’s insurer. Priya may accept its $25,000 limit and sign a limited release of that carrier and Tom. Her UM policy may not forbid this or require her UM insurer’s permission, and the release does not bar recovery under her UM coverage (O.C.G.A. § 33-24-41.1(a), (c), (d)(1)).
4. Establish liability. If she sues Tom, a copy of the suit is served on her UM insurer as if it were a named defendant (O.C.G.A. § 33-7-11(d)). The policy may not require arbitration, and, subject to its other provisions, nothing may be required of her except establishing Tom’s legal liability (O.C.G.A. § 33-7-11(g)).
5. Compute the recovery. Tom’s $25,000 plus up to $100,000 of UM equals $125,000, within her $150,000 in losses. Had she selected in writing the option that treats Tom’s car as uninsured only for the difference between his available liability limits and her UM limits, UM would pay at most $75,000, for $100,000 in total (O.C.G.A. § 33-7-11(b)(1)(D)(ii)(II)).
6. If the UM insurer stalls. A refusal to pay within 60 days of her demand, found to be in bad faith, adds up to the greater of 25 percent of the recovery or $25,000, plus attorney’s fees, decided in a separate action after judgment against Tom (O.C.G.A. § 33-7-11(j)). On a $100,000 UM recovery, both measures equal $25,000.

Result. Priya recovers $125,000. Georgia Auto Insurance Law covers the UM statute in full.

Case 8: A workers’ compensation claim timeline (O.C.G.A. §§ 34-9-80 through 34-9-261)

Luis, a warehouse worker with an average weekly wage of $930, hurts his back lifting a pallet on March 3 and tells his supervisor that day. His doctor keeps him off work until April 14.

1. Notice. An injured employee must notify the employer or a supervisor immediately or as soon as practicable, and compensation is not payable unless notice is given within 30 days of the accident, subject to the statute’s exceptions (O.C.G.A. § 34-9-80). Luis’s same-day oral notice to his immediate superior satisfies the rule.
2. Waiting period. No income benefits are paid for the first seven calendar days of incapacity, including the day of injury (March 3 through 9), though medical care is provided (O.C.G.A. §§ 34-9-200(a), 34-9-220). Because Luis is incapacitated for 21 consecutive days, those seven days are paid too (O.C.G.A. § 34-9-220).
3. Amount. Temporary total disability pays two-thirds of the average weekly wage, $620 a week, subject to the weekly maximum and minimum in the same Code section (O.C.G.A. § 34-9-261).
4. First payment. It is due on the twenty-first day after the employer learns of the injury, March 24, and weekly after that (O.C.G.A. § 34-9-221(b)). An employer or insurer disputing the claim must file a notice to controvert with the State Board of Workers’ Compensation by that same day (O.C.G.A. § 34-9-221(d)).
5. Late payment. Benefits payable without an award and not paid when due carry an added 15 percent, unless a notice to controvert was filed or the Board excuses the delay (O.C.G.A. § 34-9-221(e)).
6. Changing course. Once paying without an award, the insurer may controvert only for a change in condition or newly discovered evidence, unless it files a notice to controvert within 60 days of the first payment’s due date, by May 23 (O.C.G.A. § 34-9-221(h)).
7. Filing a claim. Luis’s claim is barred unless filed with the Board within one year after the injury, or, because benefits were paid, within one year after the employer’s last remedial treatment or two years after the last weekly payment (O.C.G.A. § 34-9-82(a)).

Result. These deadlines come from Title 34; Georgia’s Unfair Claims Settlement Practices Act does not cover workers’ compensation claims (O.C.G.A. § 33-6-31).

Lesson summary

• A Georgia homeowners policy in force more than 60 days may be canceled only for nonpayment, fraud or misrepresentation, a substantial increase in hazard, or a material policy violation, on at least 30 days’ notice with reasons, a FAIR Plan notice and a pro rata refund.
• A homeowners nonrenewal needs 60 days’ notice, may not rest on two or fewer non-negligent claims in 36 months, and is challenged by written notice to the insurer before it takes effect.
• Every Georgia property insurer belongs to the FAIR Plan; its decisions may be appealed to the Commissioner within 30 days, and later insurers may not hold FAIR Plan coverage alone against an applicant.
• A binder may be oral, carries the policy’s usual terms, and lasts until the policy issues or 90 days, whichever is shorter, unless the Commissioner approves an extension.
• Auto physical damage claims run on Rule 120-2-52’s 15-day, 60-day and 10-day deadlines, with a $1,000 cap on wear-and-tear deductions and a 20 percent cap on all such deductions.
• Bad-faith penalties depend on whose insurer refuses: § 33-4-6 for the policyholder’s covered loss, § 33-4-7 for third-party property damage after a demand for an amount certain, and § 33-7-11(j) for UM.
• Georgia UM pays in addition to the at-fault driver’s liability limits unless the insured chose the reduced option in writing.
• Workers’ compensation notice is due within 30 days, the seven-day waiting period is paid back after 21 days of incapacity, and the first payment is due on the twenty-first day after the employer knows of the injury.