Our last blog post covered the origins of the Holt case, which for the past 20 years has protected injury victims from insurance companies who unreasonably and untimely refuse to settle straight forward injury claims.

Because Holt exposes insurance companies who act in bad faith to potentially large penalties, insurance companies have been pushing the Georgia legislature to repeal Holt time-limit settlement demands.

On March 22, 2013, the Georgia legislature passed House Bill 336, which is a compromise between plaintiffs’ lawyers and insurance companies. The new law, signed by Governor Nathan Deal, codifies the Holt settlement demand process. Fortunately, the new settlement process leaves in place the requirement that insurance companies negotiate claims in good faith.

The new law will be known as O.C.G.A. Sec. 9-11-67.1 and will apply to all automobile wrecks after July 1, 2013. Some of the highlights of the new law are: settlement demand letters now must be sent prior to filing a lawsuit, the claim must involve injuries arising out of the use of a motor vehicle, the demand must be prepared by an attorney, the demand must allow the insurance company 30 days to accept the offer, and the demand must be sent by certified or overnight mail.

The changes will give both sides a fair opportunity to fairly and timely resolve serious car wreck injury cases.

Please call us at (404) 382-9994 if you have any questions regarding the new law.

At this point in time, Georgia law favors bad faith claims against insurance companies who fail to reasonably settle personal injury claims. In the current era of tort reform, this is a welcome relief for injury victims.

The favorable law stems from the 1989 case of Holt v. Southern General Insurance Company, SC89CV13484 (Muscogee State Court). In that case, Southern General was successfully sued for negligently failing to timely settle an automobile injury claim.

In Holt, the plaintiff offered to settle her injury claim for the other driver’s $15,000 policy limits with Southern General. Importantly, the offer was good for only 10 days (subsequently five more days were added to the deadline). Southern General never told its policy holder about the proposal and deadline, and did not respond within the time set by the plaintiff.

Three days after the settlement period expired, Southern General offered to pay the policy limit. The plaintiff rejected the proposal as not being timely and sued. Southern General made two more offers before trial to pay the $15,000. The plaintiff again turned Southern General down, saying she would no longer settle for the policy limits.

On July 19, 1988, a jury returned a verdict of $82,000.00 against the responsible driver.  After Southern General paid its policy limits of $15,000, the responsible driver was left personally liable to the plaintiff for $67,078.00 plus 12% interest. The responsible driver assigned her right to the plaintiff to sue Southern General for failure to settle.

 On July 18, 1990, a jury awarded $208,000.00 to the plaintiff, including $100,000.00 in punitive damages. The jury award was upheld by Georgia appellate courts, insuring insurance companies have a duty to exercise due care in settling claims.

Since Holt, our firm has been successfully making time-limit demands on insurance companies. We will continue to use Holt and other strategies to maximize our clients’ recoveries in every case.

On July 1, 2013, a new law will take effect that will modify the use of Holt demands. In our next blog, we will discuss these modifications and the impact they will have on future injury cases.