Georgia Insurance Law Update


Owens v. Progressive Premier Ins. Co. of Ill.
by Diana Moore

Holding: Georgia Court of Appeals affirmed the trial court’s finding that Plaintiff’s failure to notify the UM carrier of the accident until one year after it occurred was unreasonable and unjustifiable as a matter of law.

Key Quotes:

  • “Under Georgia law, whether an insured provides ‘an insurer timely notice of an event or occurrence under a policy generally is a question for the factfinder.’ Indeed, an insured may be able to ‘present justification for delay in giving notice, and whether that justification was sufficient is generally a fact-based inquiry for a jury.’ But importantly, the facts and circumstances of a particular case ‘may render an insured’s delay in giving notice of an occurrence to his insurer unjustified and unreasonable as a matter of law.’”
  • “And in such cases, ‘in which a policy’s notice provision gives no specific time frame, there is no bright-line rule on how much delay is too much.’”
  • “The law requires more than “just ignorance, or even misplaced confidence, to avoid the terms of a valid contract.”

Hernandez v. Great Am. All. Ins. Co. (10/4/22)
by Chelsea Cooke 

Holding: Court of Appeals affirmed summary judgment that held that insurer defendant did not waive its denial of coverage when providing a defense under a reservation of rights. The court held the insurer’s reservation of rights letter was sufficient to notify the plaintiff of the issues with coverage.

Key Quotes:

  • “Risks not covered by the terms of an insurance policy, or risks excluded therefrom, while normally not subject to the doctrine of waiver and estoppel, may be subject to the doctrine when the insurer, without reserving its rights, assumes the defense of an action or continues such defense with knowledge, actual or constructive, of noncoverage. But the insurer can avoid estoppel by giving timely notice of its reservation of rights which fairly informs the insured of the insurer’s position. To [be] … sufficient, the reservation of rights must, at a minimum, fairly inform the insured that, notwithstanding the insurer’s defense of the action, it disclaims liability and does not waive the defenses available to it against the insured. Additionally, the reservation of rights should also inform the insured of the specific basis for the insurer’s reservations about coverage. And importantly, to be effective, a reservation of rights must be unambiguous; if it is ambiguous, the purported reservation of rights must be construed strictly against the insurer and …in favor of the insured. Finally, the notice cannot be only a statement of future intent, and, once again, must be timely.”
  • “An insurer is not required to list each and every basis for contesting coverage in its initial reservation-of-rights letter in order to preserve its right to later assert a particular ground for noncoverage, [but] it must act reasonably promptly upon learning of a policy defense.”

Stankovich v. Axis Ins. Co. (10/31/22)
by Kayla Rocker

Holding: Court of Appeals affirmed a grant of summary judgment to an employer’s UM carrier for damages related to injuries an employee sustained when she was struck by a car while removing a safety cone used to divert traffic from a coworker’s work truck, citing the employee was not “occupying” a “temporary substitute vehicle for a covered vehicle” as defined by the policy, and (2) the employee was not “using” the covered vehicle such that OCGA § 33-7-11(b)(1)(B) mandated coverage under the UM carrier’s policy.

Key Quotes:

  • “An insurance policy is a contract and subject to the ordinary rules of contract construction, and the parties are bound by its plain and unambiguous terms. However, if a provision of an insurance contract is susceptible of two or more constructions, even when the multiple constructions are all logical and reasonable, it is ambiguous, and the statutory rules of contract construction will be applied.”
  • “Under OCGA § 33-7-11 (b) (1) (B) (2), an insured includes “any person who uses, with the expressed or implied consent of the named insured, the motor vehicle to which the policy applies.””
  • “This Court has . . . defined the term “use” as “to employ for some purpose.””
  • “Whether an injury arose out of the use of a motor vehicle, turns on consideration of (i) the physical proximity of the injury site to the vehicle, (ii) the nature of the conduct which caused the situation of jeopardy, and (iii) whether the vehicle was being utilized in the plain and ordinary sense of the word.”
  • “In evaluating physical proximity, we consider more than how close the [vehicle] was to the accident scene, because “use” also embraces the notion that the person using the [vehicle] had control over it or that such control was reasonably at hand. Thus, while the term “use” of a motor vehicle does extend beyond actual physical contact, it does not imply remoteness, and the term contemplates use of the motor vehicle as a vehicle at the time of the injury.”
  • “”[T]he purpose of the temporary substitute provision . . . is not to defeat liability but reasonably to define coverage by limiting the risk to one operating vehicle at a time for a single premium.” “The provision is not to be narrowly construed as limiting coverage but will be construed in a manner to make the policy reasonably definite as to the vehicle covered and, at the same time, afford continuous protection at a premium rate fair to both insured and insurer.” Further, if a vehicle is operable, the owner must take some step to preclude its use by another during the substitution period or there will be a material increase in the risk contemplated by the insurer. If the vehicle insured can be operated, some overt act is required to prove its withdrawal from service, although this would not necessarily require its being garaged. . . . [T]he phrase . . . “breakdown” means either a condition rendering the vehicle inoperable or one which would make its use dangerous, as opposed to a breakdown of a non-essential component.”

Farid v. Gaskell (11/1/22)
by Kayla Rocker

Holding: Court of Appeals affirmed a grant of summary judgment to defendant on a personal injury claim made by Plaintiff against its UM insurance carrier, citing that plaintiff failed to satisfy the conditions of OCGA § 33-24-41.1 to exhaust liability insurance coverage before proceeding against a UM carrier.

Key Quotes:

  • “OCGA § 33-24-41.1 (a) provides that [i]n any instance where a claim arising out of a motor vehicle accident is covered by two or more insurance carriers, one such carrier may tender, and the claimant may accept, the limits of such policy; and, in the event of multiple claimants, the settling carrier may tender, and the claimants may accept, the limits of the policy pursuant to a written agreement between or among the claimants.”
  • “Pursuant to OCGA § 33-24-41.1, then, “[e]xhausting available liability coverage is a condition precedent to a UM claim.”
  • “As a result, “[a] carrier must offer and a claimant must accept an amount equal to the limit stated in the policy, not an amount less than the limit stated in the policy.” Therefore, “[a] claimant may seek recovery under a UM policy when the claimant’s damages exceed the limits of the tortfeasor’s liability policy, after first recovering those liability limits from the tortfeasor through settlement.””