Time-Limited Demands

8471021665_99e8b56262_hThe case of Southern General Insurance Company vs. Holt, 262 Ga. 267 (1992) is one of the most significant rulings in the state of Georgia regarding personal injury law and is more commonly known as the Holt Case. It established that insurance companies should maintain “good faith” and refrain from putting their interests ahead of the insured.

Holt Case Summary

Bridget Holt negligently struck Geneva Fortson’s vehicle on June 19, 1987. Fortson was injured as a result of the collision. Fortson’s position was that her case had a value well in excess of Holt’s policy limits of $15,000. This was substantiated by the fact that she suffered a herniated disk and that her medical bills and lost wages alone exceeded the amount of the policy limits. Fortson offered to settle her case for the policy limits of $15,000 if payment was made within a specified time period. Fortson then withdrew her offer to settle when payment was not received. Fortson filed suit and obtained a jury verdict of $82,000. Holt assigned her claim against Southern General for bad faith refusal to settle within the policy limits to Fortson.

The Georgia Supreme Court held that an insurance company may be liable to its insured if it fails to act in good faith in accepting a settlement offer for the insured’s policy limits. The jury must decide if the insurer, in view of the existing circumstances, has accorded the insured the same faithful consideration it gives its own interest. Southern General was held responsible for the full amount of the verdict.

What makes this case still relevant?

In essence, this ruling provides personal injury attorneys the ability to demand the liability policy limits within a specified time frame. This action puts a lot of pressure on the insurance company to act in good faith in deciding whether to pay those limits. If the insurance company does not pay their policy limits during the time limitation, they can be responsible for a verdict in excess of the policy limits. For example, assume a case has a value of $50,000 and the insured’s policy limits are only $25,000. The insurance company is given an opportunity to settle the case for the policy limits of $25,000 within a specified time period and fails to act in good faith in doing so. The case is taken to court and a jury verdict of $50,000 is obtained. The full $50,000 can be obtained from the insurance company by showing that the insurance company did not act in good faith in failing to pay the policy limits. Therefore, what was previously a worst-case scenario of $25,000 for the insurance company ended up costing them $50,000 because they did not settle when they had the chance and they did not protect their policy holder from excess judgment (that is, judgment from a court over the amount of the insurance policy).

Statute O.C.G.A. Sec. 9-11-67.1

On July 1, 2013, Georgia legislature passed a bill outlining the process for settlement demands as per the Holt Case. This statute applies to all automobile wrecks occurring after July 1, 2013. The law provides a minimum of thirty days for the specified time period and outlines the information a plaintiff is required to provide in the demand.


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