In a significant win for insurers, the Court of Appeals of Georgia has ruled that GEICO complied fully with state law when handling a settlement offer, rejecting attempts by claimants to impose vague and subjective disclosure standards.
The decision, issued on January 30, brings much-needed clarity to Georgia’s settlement statute and limits claimants’ ability to manufacture bad-faith disputes based on undefined expectations.
What the Georgia Appeals Court Decided
The appellate court ruled that insurers are only required to provide a sworn statement confirming whether all known applicable coverage has been disclosed. The law does not require insurers to offer subjective “assurances” or conduct speculative investigations beyond reasonable internal checks.
This ruling reverses a lower court decision and reinforces the plain language of Georgia’s settlement statute.
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Background of the Case
The dispute arose from a February 2024 car accident in which D’Andre Hancock was injured after a vehicle driven by Rachell Gabrell collided head-on with his car.
Key facts of the case include:
- Gabrell was insured by GEICO with a $25,000 policy limit
- Hancock offered to settle for the policy limit
- The settlement demand required GEICO to “adequately assure” that no other insurance coverage existed
GEICO responded by providing a sworn coverage statement, confirming that the $25,000 policy was the only applicable coverage.
Despite this, Hancock rejected the settlement—twice—arguing that GEICO failed to sufficiently prove that no other insurance could apply.
Why the Claimant Rejected the Settlement
Hancock argued that GEICO should have gone further by investigating whether Gabrell lived with relatives who might have insurance policies extending coverage to the accident.
A trial court initially agreed with this position and denied enforcement of the settlement. GEICO appealed.
Appeals Court: The Law Requires a Sworn Statement, Nothing More
The Court of Appeals of Georgia unanimously reversed the lower court’s decision.
Writing for the court, Judge Markle emphasized that Georgia’s settlement statute requires only one thing: a sworn statement regarding insurance disclosure
The court made several critical points:
- The statute does not define how insurers must investigate
- It does not require insurers to “adequately assure” claimants
- It does not mandate searches for coverage with other insurers
- Subjective standards would make settlements unworkable and arbitrary
The court warned that allowing claimants to reject settlements based on whether they “felt satisfied” would undermine the entire statutory framework.
Why This Ruling Matters for Insurers and Claims Professionals
This decision has broad implications for insurers operating in Georgia.
Key implications:
- Insurers can rely on objective statutory requirements
- Claimants cannot impose extra-statutory conditions
- Valid settlements cannot be undone based on subjective dissatisfaction
- The risk of manufactured bad-faith claims is reduced
The court also noted that GEICO went beyond what the law required, confirming through underwriting that:
- No additional GEICO policies existed
- Gabrell was not working at the time of the accident
- No commercial coverage applied
Importantly, the statute does not require insurers to investigate policies issued by other carriers.
Alignment With Georgia’s 2021 Settlement Law Reforms
The ruling aligns with Georgia’s 2021 amendments to its settlement statute, which were enacted to close loopholes that plaintiffs had been using to trigger bad-faith litigation.
The court cited Anderson v. Jones (2022), which confirmed the legislature’s intent to prevent claimants from adding non-statutory requirements that would defeat lawful settlements.
Practical Takeaway for Claims Handlers
What insurers must do:
- Conduct a reasonable internal coverage review
- Provide a sworn statement disclosing known applicable insurance
- Accept statutory settlement terms in writing
What insurers are not required to do:
- Offer subjective assurances
- Investigate speculative third-party coverage
- Satisfy undefined claimant expectations
Once statutory requirements are met, the settlement is enforceable.
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About GEICO Insurance
GEICO (Government Employees Insurance Company) is one of the largest auto insurers in the United States, serving more than 28 million vehicles nationwide. Founded in 1936, GEICO offers auto, homeowners, renters, motorcycle, and umbrella insurance through a direct-to-consumer model known for competitive pricing and strong claims efficiency. A subsidiary of Berkshire Hathaway, GEICO is widely recognized for its financial strength, innovative underwriting, and streamlined claims operations.
