How confusing can an insurance policy get? Georgia court set to decide

The court will decide whether insurers should be allowed to forgo updating the statute of limitation for claims in their policies if that information is included in later endorsements.

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A policyholder’s lawyer has asked the Georgia Court of Appeals whether insurance companies should be allowed to forgo updating the statute of limitation periods for claims in their insurance policies if that information is later included in that policy’s endorsements.

The crux of plaintiff-appellant’s counsel JL King’s argument was that this system is confusing for laypeople and was made doubly convoluted as legislation and case law further complicated the rules around statutes of limitations for insurance claims in the mid-aughts and 2010s.

“[Georgia Farm Bureau’s] corporate representative agreed that [the policy] may cause confusion for an insured,” King said. “And we believe that it’s confusing and, quite frankly, duplicitous to have this amendment.”

King said that, for his client, the results were costly and that the client had to sell off a third of his farmland after Georgia Farm Bureau not only refused to make payments on the claims they agreed to cover, but the trial court issued a summary judgment on the grounds that the plaintiff-appellants began their legal action after the statute of limitations to do so was up.

If an insurance company promises to pay a claim and doesn’t, it waives the statute of limitations for claims regarding those items. Presiding Judge Sarah Doyle asked whether there is a difference between an offer or acceptance to pay a claim and a promise to pay.

Will Horkan, arguing on behalf of defendant-appellee Georgia Farm Bureau, said that yes — there is — and that their client never actually made an official agreement to pay those claims.

Defendant-appellees further argue that, because some of the claimant’s claims were based on the policy’s other endorsements, they knew about the amended statute of limitations. The defendant-appellees also contended that negotiations with an insurance representative do not count as a commitment to pay those claims.

Plaintiff-appellants contest this point, claiming the defendant-appellants sent a letter to the Georgia Insurance Commissioner saying that they were in the process of making payments on their client’s claims that the client never received.

Judge Herbert Phipps asked King what the insurer should have done to prevent the confusion leading up to the incident. King said that the insurer should’ve updated the language of the policy packet instead of issuing an endorsement and/or have sent out a memo regarding the change to the statute of limitations.

Defendant-appellees contended that this wasn’t something they were required to do, and oftentimes endorsements are issues in the middle of a policy period to reflect changing statutes. Here this was not the case, as the shortened statute of limitations was not a new policy.

In response, Doyle asked: “So, [in this kind of scenario] is there a reason why insurance companies shouldn’t be required to actually update their main policy so that we don’t have this kind of situation/? … We as lawyers and judges have seen enough of this to know you‘ve got to keep going [through the policy], but I don’t think the average person understands that.”

From there, the conversation turned from the objective fairness of the events to the timeline of what happened. In addition to asking the court to determine whether Georgia Farm Bureau actually committed to paying some of the claims and then never did, plaintiff-appellants asked the court to consider when a legal action actually starts.

To this last point, King said that his client sent a letter to the insurers giving them 60 days’ notice to pay their claims before they would seek bad faith damages. This letter was sent before the statute of limitations ended, as stipulated by Georgia Farm Bureau, and, in King’s view, that letter initiated an action.

“The Supreme Court said true injustices may be remedied by the court through existing principles and cases like this representation issue,” King said. “This is one of those true injustices.”

The case is Ronnie Shingler v. Georgia Farm Bureau Mutual Insurance Company, no. A23A0672 in the Georgia Court of Appeals. The case was heard by Judges Sarah Doyle, Herbert Phipps and Elizabeth Gobeil.

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