Time-Limited Settlement Demands in Georgia: How They Work After the 2024 Changes

Why demands within policy limits matter

Georgia law has long held that an insurer can be liable for the full judgment against its insured, even above the policy limits, if it unreasonably fails to accept a reasonable settlement offer within those limits. In First Acceptance Insurance Co. v. Hughes (2019), the Georgia Supreme Court held that "an insurer's duty to settle arises only when the injured party presents a valid offer to settle within the insured's policy limits." In that case, an offer without a deadline to accept didn't trigger liability when the insurer didn't accept before it was withdrawn.

In plain terms, a clear, valid demand within limits is what creates the pressure. A vague letter doesn't.

What the statute covers

• Offers to settle "a tort claim for personal injury, bodily injury, or death arising from a motor vehicle collision." It does not cover premises liability claims like slip and falls, and it does not apply to product liability claims.
• Offers made from the time the claim arises until the named defendant files an answer (or, with several defendants, until all have answered or defaulted).
• Offers "prepared by or with the assistance of an attorney," in writing.
• Any such offer is an offer to enter a bilateral contract.

The seven required terms

Under the 2024 version, these "shall be the only material terms" of the offer:

• A deadline to accept of not less than 30 days from receipt.
• The amount of payment.
• Who will be released.
• Whether the release is full or limited, and an itemization of what the claimant will provide to each released party.
• The claims to be released.
• A date for payment, not less than 40 days from receipt.
• A requirement that the recipient provide a sworn statement on whether all liability insurance has been disclosed, due no sooner than 40 days from receipt. The claimant can waive this.

Other requirements

• The offer must include medical or other records in the claimant's possession sufficient to evaluate the claim.
• It must be sent by certified mail or statutory overnight delivery, return receipt requested, must specifically reference § 9-11-67.1, and must give an address and a fax number or email for acceptance.
• Any other term is treated as immaterial. The insurer can't be sued for failing to settle because it varied an immaterial term, as long as it complies with the statute.
• The insurer accepts by written acceptance of the seven material terms in their entirety. It may ask for clarification about the release, liens, medical bills, and similar issues without that counting as a counteroffer, but trying to change a material term isn't a clarification.
• No one can require the other side to waive the statute as a condition of settlement.

The insurer's safe harbor

The 2024 law protects an insurer that, by the dates in the offer, accepts the material terms in writing, provides any required sworn coverage statement, and pays "the lesser of" the amount demanded or its available bodily injury limits. Then there can be no failure-to-settle claim based on that offer, even if the offer says the statute doesn't apply.

Liens, Medicare, and the release

A demand has to account for who gets paid from the settlement: hospital liens, health plan reimbursement, Medicaid, and Medicare. Insurers often raise these as clarification questions, and mistakes here can derail an otherwise good settlement. See hospital liens and Medicare, Medicaid, and health insurance liens.

Other demand statutes

• Interest on unliquidated damages (O.C.G.A. § 51-12-14): a written demand that says it's made under that section can earn interest at prime plus 3% if the judgment is at least the amount demanded.
• Offers of settlement after suit (O.C.G.A. § 9-11-68) can shift attorney's fees. See what happens when you file a lawsuit.
• Vehicle damage demands under O.C.G.A. § 33-4-7 have their own 60-day rule. See property damage claims.

Why this is lawyer work

The statute applies to offers prepared with an attorney, and its terms are technical. A demand sent too early, before treatment shows the full injury, can leave money on the table. A demand that misses a required term can lose its leverage. Timing, policy limits, liens, and medical records all have to line up. If an insurer has already contacted you, read what to say when the insurer wants a statement, then talk to a lawyer before sending anything.

Frequently Asked Questions