Can You Sue the At-Fault Driver’s Insurance Company After a Car Accident? 

Key Points  

• In most car-accident cases, you cannot sue the at-fault driver’s insurance company directly. Georgia’s “No Direct Action” rule requires you to file a lawsuit against the at-fault driver first. 
• To sue an insurance company directly, a judgment against the at-fault driver is often required, which — if not paid in full — may later lead to a direct action against the insurance company.  
• Even though the at-fault driver’s insurance company may not be sued directly, the insurance company will defend and pay the claim on behalf of the at-fault driver. 
• The good news is that many cases are settled by the insurance company on behalf of the at-fault driver before trial. Many Insurance companies will negotiate and pay a clear liability case or a large-damages claim to avoid trial. 

When you’re injured in a car accident in Georgia, you may think you can pursue compensation directly from the at-fault driver’s insurance company. This assumption is understandable, since the insurance company is ultimately responsible for paying valid claims and often reaches out to accident victims soon after a collision. 

However, Georgia law imposes a strict rule that prohibits an injured party from suing the at-fault driver’s insurance company directly, even when liability is clear and the insured driver’s fault is undisputed.  

Why You Can’t Sue The Insurance Company First in Georgia 

Georgia follows what is commonly referred to as the “No Direct Action” rule. Under this rule, if another driver causes a collision that results in your injuries, you cannot immediately file a lawsuit against that driver’s insurance company. Instead, you must first pursue legal action against the at-fault driver personally. 

In practical terms, this is because you are not part of the contract between the at-fault driver and their insurance company. The insurance company has entered into an agreement with its policyholder, not with you. Until a court officially determines that the policyholder is legally responsible for your injuries, the insurance company has no direct legal obligation to provide you with compensation.  

Example: Camila’s Story 

Consider the following example. Camila is stopped at a red light on Highway 85 in Riverdale when Ted, who is distracted by texting, crashes into the back of her car. Camila suffers a herniated disc in her back and accumulates $50,000 in medical expenses. Ted admits fault at the scene, and his insurance company, RAPID Insurance Company, even sends an adjuster who confirms Ted was entirely responsible for the accident.  

Despite the admission, RAPID Insurance Company later disputes the extent of Camila’s injuries. The company only offers her $5,000, claiming that much of her treatment was unnecessary. When Camila tries to negotiate, the company stops returning her calls altogether. 

Camila’s natural reaction might be to sue RAPID Insurance Company directly, reasoning that the company knew its policyholder caused the collision.  

However, under Georgia’s “No Direct Action” rule, Camila cannot sue RAPID Insurance Company at the outset. She must first file a lawsuit against Ted personally and obtain a judgment against him. Only after she has an unsatisfied judgment can she pursue the insurance company. 

Example 2: Angelo’s Story

 Here’s another common scenario. Angelo is driving through a green light at an intersection in Forest Park when Savannah runs a red light and T-bones the side of his vehicle. Angelo suffers a broken leg and is unable to work for three months. Savannah’s insurance company, Kings Auto Insurance, initially appears cooperative and even covers the cost of repairing Angelo’s vehicle. 

When it comes to Angelo’s medical bills and lost wages totaling $75,000, Kings Auto Insurance abruptly changes its position. The company asserts Angelo had the green light and that Angelo was actually at fault. Based on the denial, the company refuses to pay anything toward Angelo’s injuries.  

Angelo is furious. He believes Kings Auto Insurance is acting in bad faith, especially since Savannah admitted fault at the scene. His immediate reaction is to ask, “Can I sue the insurance company directly for refusing to pay a valid claim?”  

The answer, however, is no. Even though Kings Auto Insurance appears to be handling the claim unfairly, Georgia’s “No Direct Action” rule prevents Angelo from suing the company directly. Instead, he must file a lawsuit against Savannah first, establish her liability in court, and obtain a judgment. 

Why This Rule Exists 

This rule exists for several important legal reasons:  

1. Contract relationships: An insurance policy is a contract between the insurance company and its policyholder (the at-fault driver). Because you weren’t a party to that agreement, you can’t enforce it directly against the insurance company.  
2. Liability must be established: Courts want to make sure someone is actually legally responsible before forcing an insurance company to pay. Just because an accident happened doesn’t automatically mean someone is legally liable.  
3. Preventing shortcuts: The rule prevents injured parties from trying to bypass the at-fault driver and seek recovery directly from the insurance company, which may be contrary to Georgia’s public policy and rules of evidence in traditional negligence claims. 

The Good News for Accident Victims 

In many cases, insurance companies prefer to avoid having unpaid judgments and are therefore motivated to settle claims before trial.  

Typically, the insurance company will hire lawyers to defend the at-fault driver. Throughout the course of the lawsuit, it is common for the insurance company to negotiate a settlement to resolve the claim. 

What This Rule Means in Practice 

Georgia’s “No Direct Action” rule prevents you from bypassing the at-fault driver and filing directly against the insurance company. As a result, the process may take longer than anticipated. You’ll need patience as the legal system works through the proper steps. 

When You Can Sue an Insurance Company Directly in Georgia 
Although Georgia generally prohibits suing an at-fault driver’s insurance company directly, certain exceptions exist:  

• Motor carrier accidents: If you’re hit by a commercial truck or bus, Georgia law may permit you to sue their insurance company directly. 
• Uninsured/underinsured motorist claims: These claims involve your own insurance policy, so different rules apply. However, in rare-instances a claim for breach of contract may apply if your insurance company fails to follow the terms and conditions of your insurance policy. 
• After obtaining a judgment: Once you have an unsatisfied judgment against the at-fault driver, you can pursue their insurance company for payment. 
• Bad-Faith Refusal to settle:  In some cases, if the at-fault driver’s insurance company refuses to pay a certain type of policy limits settlement demand, known as a time-limited demand under O.C.G.A. 9-11-67.1, the insurance company could be responsible for more than the policy.  This may lead to a direct claim against the insurance company in a second lawsuit. 

Key Takeaways for Injured Drivers in Georgia 

Georgia’s “No Direct Action” rule can be frustrating when you’re dealing with an unresponsive insurance company. However, it’s important to remember that the inability to sue the insurance company directly doesn’t mean you’re powerless. The legal system provides a path to recovery; it simply requires following the proper steps. 

Frequently Asked Questions About Suing Insurance Companies in Georgia 
Q: Can I ever sue an insurance company directly in Georgia?  
A: In most ‘regular’ car accident cases, no. However, there are exceptions such as accidents involving commercial motor carriers under O.C.G.A. § 40-1-112(c) or insurance bad-faith cases – which may lead to a lawsuit against the insurance company later on.   

Q: What happens if the at-fault driver has no money to pay a judgment?  
A: If you obtain a judgment against the at-fault driver and they cannot pay, you can then pursue their insurance company directly. The insurance company will typically pay up to their policy limits to satisfy the judgment.  

Q: Do I have to wait until trial to receive payment from the other driver’s insurance?  
A: Many cases and claims are resolved through settlement negotiations before trial. Insurance companies may prefer to settle rather than risk a larger judgment from a jury.  Even though the claim is made against the at-fault driver personally, their insurance company will pay the claim or judgment on their behalf. 

Q: How long do I have to file a lawsuit after a car accident in Georgia?  
A: Georgia’s statute of limitations for personal injury claims is generally two years from the date of the accident. Missing this deadline usually means losing your right to pursue legal action. 

Q: What if the at-fault driver leaves the state after the accident?  
A: You can still file a lawsuit against them in Georgia courts if the accident occurred in the state. If the driver can’t be located for proper service, the court may provide alternative procedures to allow the case to proceed.  

Q: Will the insurance company provide a lawyer for the person who hit me?  
A: Yes. Typically, the at-fault driver’s insurance company will hire and pay for an attorney to defend the insured under the terms of the policy. This is part of the company’s contractual duty to defend its policyholder.