Demanding Payment: Timeline of Settlement
One of my clients recently asked me about how long it would take to settle her case from the date we sent off a demand to the insurance company in her car wreck case. Before even sending a demand, a claimant in a personal injury case needs to complete his or her medical treatment, so that amount of time will vary according to the injuries and treatment. After the treatment is completed and the medical bills and records are gathered (that normally takes at least 60 days), the timeline of settlement from the date of the demand also depends on the circumstances of each case. Under Georgia law (O.C.G.A. Section 9-11-67.1), the minimal amount of time a claimant must give an insurance company or at-fault driver to settle a bodily injury claim based on personal injuries sustained in a motor vehicle collision prior to filing a lawsuit is 30 days from the receipt of the offer.
Preserving Bad Faith Claims: Giving Insurance Company Reasonable Amount of Time to Settle
Thirty days is also a reasonable amount of time to give them in order to preserve any potential “bad faith” claim down the road. By bad faith, I mean that an insurance company has a duty to act in good faith to protect its insured (the at-fault driver when talking about a motor vehicle collision). By giving the insurance company a reasonable amount of time to evaluate and investigate the case and make a decision based on the information we give them, we are allowing them to fulfill this duty to their insured. If the insurance company does not act in good faith, our demand in an amount within the policy limits available will show that the insurance company had a chance to act in good faith but failed to do so. The purpose of setting it up that way upon making the initial demand is that if the insurance company comes back with something completely unreasonable, we will be able to use it against them to leverage a better settlement or to force them to pay any judgment that is in excess of the insurance coverage if the case is liquidated at trial. For example, let’s say your medical bills are $51,000.00 and the at-fault driver’s insurance coverage is $50,000.00 for the car accident that caused your injuries. If the insurance company comes back with $10,000.00 and they won’t budge from there, you will have to file a lawsuit. Let’s say we proceed all the way through litigation and go before a jury and the jury awards $100,000.00. At that time, we have a strong argument that we gave the insurance company a chance to settle for $50,000.00 and gave them sufficient information and time to accept that demand but they failed to do it; hence, the insurance company acted in bad faith. Then we can ask the at-fault party to assign the “bad faith” claim to you against the insurance company to recover the other $50,000.00. Or, they may even pay it without having to be forced into it if your case is strong enough. At any rate, you cannot preserve a bad faith claim without giving the insurance company a reasonable amount of time to investigate and evaluate the claim. Of course, the time limited demand and the information contained in it is not everything that is required to prove a bad faith claim, but it is certainly a start and needs to be done correctly in order to make sure that if a bad faith situation arises, it can be successfully prosecuted.
Unliquidated Damages Demands Preserve Right to Collect Interest for Non-Payment
Another tool that a claimant can use is the unliquidated damages demand under Georgia law (O.C.G.A. Section 51-12-14), which also requires that the insurance company or at-fault party be given at least 30 days to pay the claim. That law allows a claimant who recovers at least the amount that is demanded at trial of the case to recover interest starting from the 31st day after making the demand through to the date of judgment at trial.
Settling Presuit: Estimated 60 Days From Insurance Company’s Receipt of Demand
Normally, an insurance company does not miss the 30 day deadline for response, although it happens. If the insurance company responds with less than the demanded amount, and you do not want to file a lawsuit, we will begin a negotiation process. Pre-suit negotiations will go back and forth until an amount and terms of settlement that both sides agree upon are reached. If an agreement is reached pre-suit, the estimated time for settlement from the time the demand is sent is approximately 60 days, although that’s a rough estimate and every case is different. If you are not willing to accept anything less than the amount demanded, then you have to file suit because nothing really obligates the insurance company to settle with you pre-suit. If you do file a lawsuit, then anticipate litigation going on for at least one year–sometimes several years, depending on the case.