When an insurance company denies or delays payment on a claim arising from a commercial truck accident, Georgia law provides several avenues through which attorney’s fees and additional penalties may become recoverable. Whether fees are available depends on who is being pursued, the legal theory involved, and the nature of the insurer’s conduct. This guide explains how Georgia treats attorney’s fees in the context of bad faith insurance handling.
The General Rule on Attorney’s Fees in Georgia
As a starting point, Georgia follows what is often called the American Rule. Under O.C.G.A. 13-6-11, expenses of litigation, including attorney’s fees, are generally not recoverable as part of a damages award. Each party ordinarily bears its own legal costs. Recovery of fees is the exception, not the norm, and it requires a specific statutory basis and proof that the conduct in question fits within that statute.
Statutory Bad Faith Penalties Against Insurers
The most direct statute addressing insurer bad faith is O.C.G.A. 33-4-6. This provision applies to first-party claims, meaning situations where the insured is making a claim under their own policy. In a truck accident context, this could include a motor carrier’s own cargo or physical damage coverage, or a claimant’s own uninsured or underinsured motorist coverage.
Under O.C.G.A. 33-4-6, if an insurer refuses to pay a covered loss in bad faith, and the refusal continues for more than 60 days after a proper demand has been made, the insurer can be held liable for the loss itself plus an additional penalty. That penalty is set at not more than 50 percent of the insurer’s liability for the loss, or 5,000 dollars, whichever is greater. The statute also permits recovery of all reasonable attorney’s fees incurred in prosecuting the action against the insurer.
The statute contains procedural requirements. The claimant must make a demand and wait the statutory period before suing. Within 20 days of filing such an action, a copy of the demand and complaint must be sent to the Commissioner of Insurance. The amount of attorney’s fees is determined by the jury based on expert testimony about reasonable value, and the trial court retains discretion to adjust an award it finds greatly excessive or inadequate.
What “Bad Faith” Means
Georgia courts apply a demanding standard. Bad faith under O.C.G.A. 33-4-6 generally means a frivolous and unfounded refusal to pay. If a genuine, reasonable dispute exists about coverage or about the amount owed, the refusal is not considered bad faith, even if the insurer ultimately loses. The presence of a bona fide controversy over liability or damages defeats a bad faith penalty claim. Negligence or simple bad judgment by an adjuster does not, by itself, satisfy the standard.
Litigation Expenses Under O.C.G.A. 13-6-11
A separate route to fees exists under O.C.G.A. 13-6-11. This statute allows a jury to award expenses of litigation where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense. Several conditions apply: the plaintiff must specifically plead and pray for these fees, the claim must generally be rooted in contract or an intentional tort, and the matter must be preserved in the pretrial order.
Importantly, the bad faith referenced in O.C.G.A. 13-6-11 concerns bad faith in the underlying transaction from which the dispute arose, not bad faith in the conduct of the litigation itself. As with the insurance penalty statute, a genuine controversy over liability or the amount of damages will defeat the bad faith and stubborn litigiousness prongs.
Third-Party Claims and Failure to Settle
Most truck accident injury claims are third-party claims, meaning an injured person pursues the at-fault carrier’s liability insurer rather than the person’s own insurer. The first-party penalty statute, O.C.G.A. 33-4-6, does not directly govern these claims because the claimant is not the insurer’s policyholder.
Georgia does, however, recognize a separate concept sometimes described as Holt liability, named for a Georgia Supreme Court decision. Under that body of law, a liability insurer may have a duty to its own insured to settle a claim within policy limits when there is a reasonable opportunity to do so. If the insurer fails to settle in bad faith and a judgment exceeds the policy limits, the insured may have a claim against the insurer for the excess. That claim belongs to the insured, though it can sometimes be assigned. This is a distinct legal pathway and does not give an injured claimant a direct bad faith penalty against the other side’s insurer.
How These Theories Interact in Truck Cases
Commercial truck accident litigation often involves layered insurance, large policy limits, and multiple carriers. Whether attorney’s fees become recoverable turns on careful classification: a first-party coverage dispute may implicate O.C.G.A. 33-4-6; a claim grounded in an insurer’s failure to settle within limits implicates the separate excess judgment doctrine; and litigation expenses against a defendant generally may be available under O.C.G.A. 13-6-11 when the statutory elements are met. Georgia courts have held that O.C.G.A. 13-6-11 and certain other fee provisions can apply independently, so more than one theory may be present in a single case.
Summary
Georgia law does allow attorney’s fees and statutory penalties for bad faith denial of insurance claims, but only under defined conditions. O.C.G.A. 33-4-6 governs first-party claims and permits a penalty plus reasonable fees after a frivolous and unfounded refusal that persists past the statutory waiting period. O.C.G.A. 13-6-11 permits litigation expenses where a defendant acted in bad faith in the underlying transaction, was stubbornly litigious, or caused unnecessary trouble and expense. In every instance, the existence of a genuine, reasonable dispute is a complete answer to a bad faith claim, which is why these recoveries are treated as exceptions to Georgia’s general rule that each side bears its own fees.
Disclaimer
This article is provided strictly for general educational and informational purposes. It is intended to explain how Georgia law works as a matter of public legal education, and it does not constitute legal advice, a legal opinion, or a recommendation about any particular course of action. Reading this article, or contacting the website on which it appears, does not create an attorney-client relationship between the reader and any law firm, attorney, or author.
The law changes over time. Statutes, regulations, court rules, and judicial decisions discussed here may have been amended, repealed, superseded, or reinterpreted after the date of publication, and citations to specific code sections or cases reflect the law only as it was understood when this article was written. The application of any legal principle also depends heavily on the specific facts and circumstances of an individual matter, and outcomes vary from case to case.
For these reasons, no one should rely on this article as a substitute for advice from a licensed Georgia attorney who can review the particular facts involved. The author and publisher make no warranty, express or implied, regarding the accuracy, completeness, timeliness, or applicability of the information provided, and disclaim any liability for any action taken or not taken based on this content.