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Know your rights when making an insurance claim

Posted: April 23, 2014 - 12:01am

With the recent ice storm wreaking havoc in the CSRA, many area residents have incurred significant property damage and losses arising from fallen limbs and power outages.

Quite often, these losses are covered by first party insurance coverage. First party insurance is a contract for insurance intended to directly pay the insured for losses. Examples include automobile insurance coverage for collision, comprehensive losses and medical payments; homeowners’ insurance for property damage; and commercial insurance for the protection against the interruption of business operations.

Unfortunately, insurance companies (insurers) are not always quick to pay the fair value for lost or damaged property.

Insurers may lack resources to timely adjust claims, or they occasionally make conscious decisions to place the company’s profitability ahead of its obligation to protect the people it insures from personal financial exposure.

Under Georgia law, insurers are required to pay insurance claims for property damages within 60 days of demand by the insured homeowner. The insurer may not unnecessarily delay the payment of the claim or require unreasonable proof or documentation from the insured.

If the insurer fails to make timely payment, the insured has the right to file a lawsuit against the insurance company. If a claim is denied, the insurer must provide an adequate explanation for the denial, including the policy provision supporting that denial. The insured has a right to pursue a bad-faith claim if the insurance company does not have a good-faith basis for denying or delaying payment.

In Georgia, O.C.G.A. § 33-4-6 provides that an insurance company that acts in bad faith may be liable to the insured, not only for the damage incurred, but also an additional 50 percent of the liability or $5,000, whichever is greater.

Insurers acting in bad faith may also be liable for all reasonable attorneys’ fees incurred by the insured. Under this statute, bad faith is defined as a “frivolous and unfounded refusal to pay a claim.”

In order to be eligible for a bad-faith claim, the insured must meet the technical requirements: he must clearly demand payment in a specific dollar amount, alert the insurer that bad faith is being asserted, and allow 60 days to pay the claim. A proper demand is essential to assert a bad faith claim.

Here is a checklist for how to compel payment from insurance companies for ice storm damage: (1) obtain an estimate or appraisal for the repair or replacement costs of the damage property from a reputable contractor; (2) complete a proof of claim in the form requested by the insurer; (3) make a demand for a specific sum of compensation; (4) inform the insurer that failure to pay the claim within sixty (60) days may result in a claim for bad faith; and (5) consult an attorney to assist in recovering the amount owed.

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