Georgia Adjuster Practice Test: Georgia law, Part 2

Correct answer: D. The Act does not create or imply a private cause of action

O.C.G.A. 33-6-37 provides that nothing in the Unfair Claims Settlement Practices Act creates or implies a private cause of action. The Act is enforced by the Commissioner through hearings, cease and desist orders and penalties. An insured who wants extra damages for a bad faith refusal to pay must instead use a statute such as O.C.G.A. 33-4-6, with its own demand and proof requirements.

Reference: O.C.G.A. 33-6-37

Correct answer: A. Marking the check as final payment and a full release

O.C.G.A. 33-6-34(13) prohibits telling a first-party claimant on a payment, check or letter that the payment is final or a release unless the policy limit has been paid or a compromise was agreed, and paragraph (14) bars partial-settlement checks with release language. Identifying the coverage for each payment is required on written request, and paragraph (9) expressly preserves sworn statements the policy permits.

Reference: O.C.G.A. 33-6-34(8), (9), (13) and (14)

Correct answer: B. By the 20th, 10 days after the amount was settled

Rule 120-2-52-.03(3) requires the insurer to affirm or deny liability on motor vehicle claims within 15 days of receiving a completed proof of loss, and paragraph (4) requires payment within 10 days after coverage is confirmed and the amount is determined and not in dispute. Here that is the 10th plus 10 days, or the 20th. The 60-day figure is the outside limit for accepting or denying the claim.

Reference: Rule 120-2-52-.03(3), (4) and (5)

Correct answer: C. $1,200

Rule 120-2-52-.04(2) allows documented, itemized betterment and depreciation deductions, limits wear, tear and rust to $1,000 and missing parts to their replacement cost, and caps all such deductions at 20% of the vehicle's pre-loss market value. Here $1,000 + $400 = $1,400, but 20% of $6,000 is $1,200, so the total deduction may not exceed $1,200.

Reference: Rule 120-2-52-.04(2)

Correct answer: D. $5,000

O.C.G.A. 33-4-6(a) allows, in addition to the loss, not more than 50% of the insurer's liability for the loss or $5,000, whichever is greater, plus reasonable attorney's fees. Fifty percent of $8,000 is $4,000, which is less than $5,000, so the cap is $5,000. Paying the loss after the 60-day period does not end the bad faith action.

Reference: O.C.G.A. 33-4-6(a)

Correct answer: B. Peach Mutual does not settle within 60 days and Liam recovers $9,000 or more

O.C.G.A. 33-4-7 gives a third-party claimant a bad faith remedy on motor vehicle property damage claims when a demand for an amount certain is sent by certified mail or statutory overnight delivery, the insurer refuses or fails to settle within 60 days, and the claimant ultimately recovers at least the amount demanded. The penalty is up to 50% of the insured's liability or $5,000, whichever is greater, plus attorney's fees.

Reference: O.C.G.A. 33-4-7(a) through (c)

Correct answer: A. $25,000 per person and $50,000 per accident bodily injury, $25,000 property damage

O.C.G.A. 33-34-4 requires owners to carry liability insurance equal to the security required by the Motor Vehicle Safety Responsibility Act, and O.C.G.A. 40-9-2 defines proof of financial responsibility by reference to the limits in 33-7-11(a)(1)(A): $25,000 bodily injury per person, $50,000 per accident and $25,000 property damage, often written as 25/50/25. Since May 14, 2025, O.C.G.A. 33-7-16 requires higher limits (at least 50/100/50) for drivers convicted of DUI.

Reference: O.C.G.A. 33-34-4; O.C.G.A. 40-9-2(5); O.C.G.A. 33-7-11(a)(1)(A); O.C.G.A. 33-7-16

Correct answer: D. $100,000, because her UM pays in addition to his limits

Under O.C.G.A. 33-7-11(b)(1)(D)(ii)(I), the vehicle is treated as uninsured to the full extent of her UM limits, and UM pays in addition to the at-fault driver's liability coverage, so $100,000 is available; her $150,000 of damages exceeds the $125,000 combined total. The reduced-by option applies only if the insured selects it in writing, and UM can be rejected only in writing.

Reference: O.C.G.A. 33-7-11(a)(3) and (b)(1)(D)(ii)

Correct answer: B. An eyewitness, other than Malik, who corroborates his account

When the owner or operator is unknown, O.C.G.A. 33-7-11(b)(2) normally requires actual physical contact between the unknown vehicle and the insured or the insured's property. Physical contact is not required if the claimant's description of how the occurrence happened is corroborated by an eyewitness other than the claimant. Subsection (c) also requires the accident to be reported as Georgia law requires.

Reference: O.C.G.A. 33-7-11(b)(2) and (c)

Correct answer: D. $300,000

O.C.G.A. 33-36-3(4)(D) excludes from a covered claim any part of a first-party claim above the policy limits or $300,000, whichever is less. Her $420,000 loss is within the $500,000 limit, so the $300,000 statutory cap controls. The net worth exclusion applies only to first-party claimants worth more than $10 million, and claims under $50 are not covered at all.

Reference: O.C.G.A. 33-36-3(4)(C), (D) and (G)

Correct answer: A. Omar must first exhaust his rights under the solvent insurer's policy

O.C.G.A. 33-36-14(a) requires a person whose claim is both a covered claim against an insolvent insurer and within the coverage of a solvent insurer's policy to exhaust the solvent policy first. The solvent policy is primary, the insolvent insurer's policy is secondary, and the pool's obligation is reduced by amounts received from the solvent insurer. Georgia's UM statute treats a vehicle whose liability insurer is insolvent as uninsured.

Reference: O.C.G.A. 33-36-14(a); O.C.G.A. 33-7-11(b)(1)(D)(iv)

Correct answer: A. The Georgia FAIR Plan, with its contact address

When an insurer cancels a residential property policy for a reason other than nonpayment, or refuses to renew it, O.C.G.A. 33-24-46(e) requires the notice to tell the named insured about possible eligibility through the Georgia Fair Access to Insurance Requirements (FAIR) Plan and give the address for checking eligibility. Under O.C.G.A. 33-33-3, every insurer writing property insurance in Georgia must belong to the plan and its underwriting association.

Reference: O.C.G.A. 33-24-46(e); O.C.G.A. 33-33-1 and 33-33-3

Correct answer: D. 10 days

O.C.G.A. 33-24-44(b) generally requires 30 days' written notice of cancellation, but subsection (d) allows 10 days' notice when the cancellation is for nonpayment of premium or when the policy has been in effect less than 60 days and is canceled for any reason. After 60 days, O.C.G.A. 33-24-46(c)(2) limits homeowners cancellations to nonpayment, fraud or misrepresentation, a substantial increase in hazard, or violation of material policy terms.

Reference: O.C.G.A. 33-24-44(b) and (d); O.C.G.A. 33-24-46(c)

Correct answer: B. The cancellation stands, but the insurer owes a penalty plus 18% yearly interest

If the unearned premium does not accompany the notice, O.C.G.A. 33-24-44(c)(1) requires the pro rata refund on or before the cancellation date. Under paragraph (3), an insurer or agent that returns it late owes the insured a penalty figured as a percentage of the refund, plus interest at 18% per year until paid. The statute also says a late refund does not invalidate a notice of cancellation properly given, so the policy still ends on schedule.

Reference: O.C.G.A. 33-24-44(c)(1) and (3), current text and as amended by 2026 Ga. Laws Act 635 (HB 1344), Section 11-14, effective January 1, 2027

Correct answer: C. Foreign insurer

O.C.G.A. 33-3-1 defines a domestic insurer as one formed under Georgia law, a foreign insurer as one formed under the laws of another U.S. state, and an alien insurer as one formed under the laws of a country other than the United States. Because it holds a Georgia certificate of authority, the Ohio company is also an authorized insurer, not an unauthorized one.

Reference: O.C.G.A. 33-3-1(2), (4) and (5)