Georgia bill would end practice of motor & insurance carriers legal joinders

Backers said it would lower insurance rates and improve business outcomes for small trucking companies. Opponents said it would deny plaintiffs valid procedural claims.

“Senate Bill 191 really came out of the idea that Georgia is one of only four states left that still allows plaintiffs’ attorneys to seek damages from the actual insurance carrier,” Georgia State Sen. Shawn Still said. “In any other industry, in any other motor vehicle accident, you go after the policy of the company that the driver at fault has.” (Credit: 5m3photos/Adobe Stock)

The Georgia Senate’s Transportation Committee is considering a bill that would repeal a statute allowing the joinder of motor and insurance carriers in tort and contract causes of action.

Committee chairman Sen. Greg Dolezal, R-Cumming, jokingly referred to the measure as “the lobbyists’ employment act of 2023,” as heavy lobbying took place on both sides of the issue. Those in favor of the bill said it would lower insurance rates and improve business outcomes for small trucking companies. Those opposing said it would deny plaintiffs valid procedural claims.

Senate Bill 191 enjoys support from many of the same Republican co-sponsors as SB 203, also known as the Trucking Opportunity Act of 2023, and the bill’s main sponsor is Sen. Shawn Still, R-Norcross. By and large, supporters of the legislation represented insurance and trucking companies and detractors spoke on behalf of the Georgia Trial Lawyers Association.

“Senate Bill 191 really came out of the idea that Georgia is one of only four states left that still allows plaintiffs’ attorneys to seek damages from the actual insurance carrier,” Still said. “In any other industry, in any other motor vehicle accident, you go after the policy of the company that the driver at fault has.”

In practice, Still said this means that in Georgia, if an at-fault driver’s insurance policy is maxed out, the plaintiffs can sue the insurance carrier itself for additional damages. This, in turn, has raised commercial vehicle insurance rates, causing most trucking insurance companies out of the state and making it next to impossible for small trucking companies to get off the ground.

Still framed the policy change as an update for the greater good of truckers and small businesses across the state. According to the senator, Georgia’s original policy arose as a way of tracking down companies, so, in the event of an accident, plaintiffs would be able to recover damages. However, with the advent of modern, digital tracking, there is no longer a need for these stipulations and it’s time to clean up the code.

“[SB 191] treats for-hire trucking companies the same way we treat every other business in the state — by removing their insurance company as a named defendant from the caption of the lawsuit.” Insurance and Fire Safety Commissioner John King said in favor of the bill. “This legislation does not cap judgments, it doesn’t make it more difficult to track down truck drivers [and] it doesn’t prevent anyone from receiving their fair day in court.”

Trial lawyers disagree. 

Brandon Peak, speaking on behalf of the Georgia Trial Lawyers Association argued that this direct action statute has nothing to do with increasing the dollar amount of jury verdicts. 

“The amount that a plaintiff is able to recover in a direct action statute is limited to the amount of the insurance coverage — period,” Peak said. “And that’s only the first level of insurance. There is no scenario where changing this law affects extra-contractual damages.”

Peak also said the direct action statute allows plaintiffs to sue insurance companies directly when the defendants themselves avoid being served. He further argued that this wouldn’t cost insurance companies any extra money because claims amounts are tied to policy limits.

Additional discussion of the bill centered around whether the current direct action statutes leave insurance companies operating at a loss in Georgia. Those in favor of SB 191 repealing the current rules say that it does and that commercial trucking insurance is significantly more expensive than in other Southern states. 

Indeed, according to BravoPolicy, an independent insurance agency, in 2023, Georgia ranked sixth highest in the country in commercial insurance vehicle rates, with an average local premium rate of $15,200. In the South, this is second only to Louisiana, boasting an average local premium rate of $19,736 — the second highest in the country.

However, BravoPolicy and opponents both point out that insurance prices are affected by a lot of factors — not just litigiousness. Some states are riskier to drive in or are home to businesses with more dangerous cargo (this year the American Transportation Research Institute found that nine metro Atlanta interchanges are the worst in the country for truckers hauling freight). Members of the Georgia Trial Lawyers Association also claimed that commercial vehicle insurers still make billions of dollars in Georgia.

“[Insurance companies] are making a decision to oppose the statute because it’s just something they don’t like,” Former Georgia Trial Lawyers Association President Dan Snipes said. “But it’s not going to have one bit of difference on what the premiums are priced in Georgia.”

Profitability aside, Atlanta lawyer Mark Bardrack, who represents trucking companies and is in favor of the bill, said the simple act of including the insurer on court documents increases the likelihood that juries will award more money to a plaintiff. 

“That’s the only real benefit the plaintiff gets from it,” Bardrack said. “The jury doesn’t know about [liability limits]; they’re not told that. They just see ‘Nationwide Insurance’ or ‘AIG Insurance’ on that verdict form. That’s not allowed in any other type of case. That’s fundamentally unfair.”

As the committee moved to vote on a motion to pass, with seven members voting in favor of the bill and five voting against it. 

Sen. Josh McLaurin, D-Sandy Springs, a lawyer and Transportation Committee member who voted against the motion to pass, had the final word in the discussion:

“Putting aside the question of whether rates are actually determined by this … the thing that really disturbs me about this bill is the idea that we’re trying to save money in Georgia and ‘protect local businesses’ by denying valid claims just by virtue of procedural defect that we can’t find somebody to serve,” McLaurin said. “If that’s really the will of the committee, I just want us to admit that’s what we’re doing.”

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