An insurer denying because its own policy was allegedly obtained fraudulently
Start a free AI-assisted chat and connect with an experienced Georgia attorney, with no obligation.
Reviewed & verified by A. Jason Velez, Esq.*
Founding Attorney, 1LAW · Last reviewed December 16, 2022
Legal Inquiry
Consumer Legal Issue
I was in an accident in Georgia where the other party was at fault. Their insurer denied all claims on the basis that the at-fault driver had bought the vehicle from their insured. I found that the other driver had been the registered owner since April 2021 while the policy was opened in December 2021, and when I raised that the adjuster said it meant the policy had been opened fraudulently. We then claimed on our own policy, with the same company, and were told liability did not cover a passenger's medical costs even though we are not in the same household.
Attorney Answer
Two separate denials are in play here, and only one of them is about the other driver at all.
The first is the liability insurer refusing on the ground that its own insured obtained the policy improperly. Whether an insurer can avoid a policy on that basis is a question between the insurer and its policyholder — but it is being used to defeat your claim, and the ownership timeline you have found is exactly the sort of fact that determines it.
The second denial is the more immediately useful one, because it points at your own coverage. Where the at-fault driver's insurance does not respond, uninsured motorist coverage is what is designed to fill the gap. O.C.G.A. § 33-7-11 governs it in Georgia and sets minimum amounts of not less than $25,000 for bodily injury to one person, and $50,000 for two or more, subject to the per-person limit.
On the household point: household and residency exclusions are common in motor policies, and they are read closely rather than loosely. If the exclusion as written requires residence in the same household and that is not the case, the denial should be tested rather than accepted.
And here the bad-faith statute may actually apply, because this is your own insurer. O.C.G.A. § 33-4-6 addresses an insurer's refusal to pay a covered loss after a demand by the policyholder — a first-party remedy, which is what a claim against your own carrier is.
What you can do
1. Ask your own insurer, in writing, to identify the exact policy wording it relies on for the household exclusion. 2. Ask the liability insurer in writing for its stated basis for rescinding or denying under its policy. 3. Keep the ownership records you found — registration date against policy inception is the crux. 4. Confirm what uninsured motorist coverage your own policy carries and in what amount. 5. Speak to a Georgia attorney, because a first-party denial engages remedies that a third-party denial does not.
⏱ Time limits apply. O.C.G.A. § 9-3-33 requires actions for injuries to the person to be brought within two years after the right of action accrues. Waiting also costs evidence — footage is overwritten and memories fade — so the practical deadline is usually much earlier than the legal one.
A Georgia attorney can tell you quickly how the facts here line up, and most will look at a matter like this at no cost.
*Attorney review is supported by AI-assisted drafting and legal research algorithms. Use of this Chat does not create an attorney-client relationship.
By using this service you agree to our Terms of Use and our Privacy Policy.
Courts & Legal Aid in Georgia
- File or look up a case through the Georgia Courts.
- Get free civil legal help from GeorgiaLegalAid.
- Use the LSC — Find Legal Aid to find a local legal-aid office by ZIP code.
- Use the LawHelp.org to browse free legal information and self-help resources.
- Use the ABA Lawyer Referral Directory to get matched with a local attorney through your state bar.
Frequently Asked Questions
What happens when the at-fault driver's insurer denies coverage entirely?
Uninsured motorist coverage is designed for that situation. O.C.G.A. § 33-7-11 governs it in Georgia and sets minimums of not less than $25,000 for bodily injury to one person and $50,000 for two or more, subject to the per-person limit.
Can an insurer refuse a claim because its own insured obtained the policy improperly?
That is a dispute between the insurer and its policyholder, but it is often raised against a claimant. The facts about when the vehicle was acquired and when the policy incepted are what determine it.
Does Georgia's bad-faith statute apply to a claim on one's own policy?
O.C.G.A. § 33-4-6 concerns an insurer's refusal to pay a loss covered by its policy after a demand by the policyholder. It is a first-party remedy, so it is directed at an insured's own insurer rather than the other driver's.