Understanding Prejudgment Interest and How it Can Be Applied to a Georgia Car Accident Settlement
How much prejudgment interest can I expect for my Georgia car accident settlement?
In Georgia, the interest rate is the prime rate plus 3%, starting 30 days after your demand letter. For cases filed after July 1, 2003, this variable rate typically ranges between 6-8% annually.
Will I receive prejudgment interest if I settle my case before trial?
No, prejudgment interest only applies when your case goes to trial and results in a judgment that equals or exceeds your demand. Settlement agreements made outside of court typically resolve all claims, including any potential prejudgment interest.
If I send my demand letter to the insurance company instead of the driver, will I still get prejudgment interest?
Generally no, as the law requires sending the demand directly to the at-fault person via certified mail or an approved overnight delivery service. However, if you also send it to the driver, or if the insurance company specifically directed all correspondence to them, you may still qualify.
Can the insurance company avoid paying prejudgment interest in making a partial payment?
No, they must offer to pay your full demand amount plus accrued prejudgment interest to stop the clock. Any partial payment will reduce the principal amount on which prejudgment interest is calculated but doesn’t stop interest from accumulating.
If my judgment includes $50,000 for medical bills and $100,000 in punitive damages, does that count as exceeding my $75,000 demand?
No, because only the $50,000 in compensatory damages would count toward meeting your demand. Punitive damages are excluded when determining if you've met the threshold for prejudgment interest.
Can I get prejudgment interest even if I paid my medical bills myself and didn’t have to pay any interest on a loan or a credit card?
Yes, you're still entitled to prejudgment interest even if you didn't borrow money or incur finance charges. Prejudgment interest compensates you for the financial loss of not having your money sooner, regardless of how you managed your expenses during the delay.
