The Payment of Georgia Insurance Premiums to an Agent vs. Directly Paying the Insurance Company

When you buy a home, one of the most important things to do is to also buy ample insurance for your residence. This way, in the event of fires, floods, or other disasters, you are able to recover from the damage incurred. Choosing an insurance company or plan, however, can often be tricky. Depending on the policy, there may be different methods to pay your premiums and maintain your status as a policyholder. This is why potential home insurance buyers are advised to read all of the fine print on their policies and subsequent notices carefully, to avoid issues with their coverage in the future. The same goes for any type of insurance policy, including Georgia car insurance policies.

In a recent Court of Appeals of Georgia decision, the court considered a case involving the proper payment of insurance premiums. The plaintiffs initially set up an insurance policy for their residence with an agent, and the plaintiffs paid their premiums directly to the agent rather than to the insurance company. To renew their coverage, the insurance company alleged that they sent the plaintiffs a notice that they needed to send their premium to the insurance company directly, which the plaintiffs claimed they never received. The plaintiffs continued paying the agent directly instead. Eventually, the insurance company canceled the policy. Following a fire that caused the plaintiffs to lose their home, the plaintiffs sued the insurance company after it denied their claim.

On appeal, the court had to decide whether the insurance agent that the plaintiffs used was an “agent” of the insurance company. If so, then the defendant could be bound by the agent’s acceptance of the plaintiff’s payment of premiums directly to her. Because the renewal notice and cancellation notice sent from the insurance company to the plaintiffs indicated that premiums were to be paid directly to the insurance company and had no provisions for payment to the agent, the court ruled that the agent was not bound to the insurance company.

In Georgia, an insurance company can also be bound to an apparent agent because there was an assumption by the plaintiffs that the agent had the authority to perform particular acts or deals on behalf of the insurance company. The court, however, felt that the plaintiffs had received ample notice from the insurance company when they were told that premiums needed to be paid directly to the insurance company, rather than the agent. As a result, the court held that the plaintiffs were unable to prove that they relied on their assumption that paying premiums to the agent was acceptable because they were informed by the renewal and cancellation notices of the insurance company’s premium payment policies.

While this claim dealt with homeowner’s insurance, the court’s logic would also apply to auto insurance policies.

Do You Need a Georgia Insurance Attorney?

If you or someone you know is having issues involving insurance policies and payment of premiums, contact the experienced attorneys at McAleer Law today. Our team of lawyers has worked on all types of Georgia car accident claims, and other personal injury cases, and will be happy to represent you in getting the damages you deserve. For a free initial consultation on your claim, contact us today at 404-622-5377.

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