Must a Settlement Agreement “Adequately Assure” Insurance Coverage?
In an interlocutory appeal, a defendant appealed from the trial court’s order denying her motion to enforce the settlement in a negligence action arising from a car accident. On appeal, she argued the trial court erred by finding that the parties didn’t reach a binding settlement agreement under O.C.G.A. § 9-11-67.1.
Geico’s Usual Shenanigans
In February 2024, the plaintiff was injured when his car was struck head-on by a vehicle driven by the defendant. At the time of the accident, the defendant was insured under a GEICO policy.
The plaintiff made an offer of compromise to GEICO pursuant to O.C.G.A. § 9-11-67.1 to settle his claim against the defendant for the policy limit of $25,000 in exchange for a limited liability release. The offer purported to require that GEICO provide, pursuant to O.C.G.A. § 9-11-67.1(a)(3), an oral statement from the assigned claims representative before a court reporter, disclosing the full amount of insurance coverage available to the defendant.
The demand stipulated that failure to provide the oral statement and “adequately assure” the plaintiff of the available coverage would be considered a counteroffer. The letter further provided that if GEICO failed to meet all material terms of the demand, the offer to settle would be deemed rejected.
By letter, GEICO accepted all the material terms of the offer. GEICO’s representative subsequently gave a videotaped statement under oath regarding all available insurance. GEICO’s representative testified as follows:
Q: All right. And you understand that you’re here to provide a statement under oath concerning whether all liability and casualty insurance issued by GEICO that may provide coverage for the plaintiff’s claims against GEICO’s have been disclosed to the plaintiff?
A: I understand.
…
Q: All right. And the purpose of the investigation was to ensure that we weren’t just relying on your personal knowledge, but also GEICO’s knowledge as a company?
A: I understand.
Q: Okay. As part of your investigation, did you determine whether or not there were any commercial policies that may have been issued that may provide coverage in this case?
A: Throughout my investigation, I determined that there wasn’t any additional coverage from our insured. Is that what you’re asking?
Q: No. Did you-did you look both in personal lines, as well as commercial lines to figure if there were commercial policies that may be applicable?
A: Yeah. I did all that was reasonable and necessary through the GEICO procedures confirming that there weren’t any other coverages.
Q: Okay. What do you mean, you did what was reasonable and necessary?
A: So we do a coverage referral to our underwriting department to confirm with underwriting if there were any other coverages or linked policies, and they confirmed no other coverage with GEICO. So typically when they run that, that’s based on if you’re asking for commercial specifically. They run it for all policies that could be potentially linked to any other policies.
The representative also testified that the defendant confirmed there were no other policies, and she wasn’t acting in the scope of her employment at the time of the accident. He further testified that, although he could not confirm if she was living with any relative at the time, the defendant didn’t have any other policies that could cover the loss.
Shortly after providing the statement, and believing it had complied with all the conditions of the settlement offer, GEICO sent an e-mail to the plaintiff’s counsel, inquiring why the settlement check had been rejected twice. The plaintiff’s counsel responded that GEICO had rejected the terms of the settlement offer because he was dissatisfied with its representative’s statements under oath as they didn’t comply with the terms of the plaintiff’s demand under O.C.G.A. § 9-11-67.1(a)(3).
The plaintiff then filed a lawsuit against the defendant, and she moved to enforce the settlement, arguing:
- GEICO had timely accepted the plaintiff’s offer;
- She’d satisfied all the material terms of the plaintiff’s offer pursuant to O.C.G.A. § 9-11-67.1; and
- She complied with O.C.G.A. § 9-11-67.1(a)(3).
Specifically, the defendant asserted that GEICO complied with § 9-11-67.1(a)(3) by providing a statement under oath indicating all liability insurance provided for the claim had been disclosed, and that the statute didn’t require it to “adequately assure” the plaintiff that the disclosure requirements had been met. The plaintiff’s counsel responded, arguing that GEICO failed to comply with the disclosure requirements of O.C.G.A. § 9-11-67.1(a)(3) and, thus, the parties had not settled the case. Specifically, the plaintiff argued that GEICO’s representative failed to investigate whether the defendant was acting within the scope of her employment at the time of the crash, or whether the defendant had any resident relatives, both of which might have yielded additional coverage.
After a hearing, the trial court denied the defendant’s motion, finding that no settlement agreement was reached because GEICO’s acceptance didn’t mirror the plaintiff’s offer. The trial court found that GEICO’s failure to provide the plaintiff adequate assurance of no additional insurance coverage amounted to a rejection of the offer. On appeal, the defendant argued the trial court erred by finding that the parties didn’t reach a binding settlement agreement pursuant to O.C.G.A. § 9-11-67.1.
O.C.G.A. § 9-11-67.1 Leads the Charge
Judge Todd Markle wrote in his opinion that O.C.G.A. § 9-11-67.1, as amended in 2021, governs offers to settle claims arising from injuries due to automobile accidents. Under the statute, an offer must be in writing and contain specific material terms, including the time frame in which an offer may be accepted; the amount of payment; who will be released from the suit; what the release will entail; and what claims will be released. The statute further provides that the offer—
may include a term requiring that in order to settle the claim the recipient shall provide the offeror a statement, under oath, regarding whether all liability and casualty insurance issued by the recipient that provides coverage or that may provide coverage for the claim at issue has been disclosed to the offeror.
The statute further provides:
(b)(1) Unless otherwise agreed by both the offeror and the recipients in writing, the terms outlined in subsection (a) of this Code section shall be the only terms which can be included in an offer to settle made under this Code section.
(2) The recipients of an offer to settle made under this Code section may accept the same by providing written acceptance of the material terms outlined in subsection (a) of this Code section in their entirety.
Additionally, the statute says that “nothing in this Code section is intended to prohibit parties from reaching a settlement agreement in a manner and under terms otherwise agreeable to both the offeror and recipient of the offer.”
Judge Markle explained that settlement agreements must meet the same requirements of formation and enforceability as other contracts. And a definite offer and complete acceptance, for consideration, create a binding contract. Further, the law favors compromise, and when parties have entered into a definite, certain, and unambiguous agreement to settle, it should be enforced. Also, the party asserting the existence of a contract has the burden of proving its existence and its terms.
Here, the plaintiff offered to settle his claim under O.C.G.A. § 9-11-67.1, and the offer included the material terms set forth in the statute, along with the requirement that GEICO confirm that all coverage had been disclosed under subsection (a)(3). GEICO accepted the plaintiff’s offer by providing written acceptance of all material terms, specifically agreeing to O.C.G.A. § 9-11-67.1(b)(1), and providing the plaintiff with the disclosure regarding all available insurance. Thus, when GEICO sent the letter accepting the terms of the offer, a binding agreement was made.
The statute is clear that the only material terms to the formation of a binding agreement that could be included in the offer are set forth in sections (a)(1). Section (a)(3) of the statute is optional, Judge Markle explained, and was included in the plaintiff’s offer. However, § 9-11-67.1(a)(3) only requires GEICO to provide the plaintiff a statement under oath regarding the disclosure of other GEICO insurance. GEICO did just that. And, contrary to the plaintiff’s contention otherwise, the plain language of the statute doesn’t dictate the form of the statement or what procedures GEICO must employ to determine if all insurance it provides has been disclosed. Nor does it require that the statement under oath regarding insurance coverage “adequately assure” the plaintiff that the disclosure requirements have been met. Rather, all the statute requires is that the statement be made under oath.
Furthermore, the plain language of the statute makes it clear the plaintiff can’t require terms more restrictive than the statutory language allows, unless the parties agree. O.C.G.A. § 9-11-67.1(b)(1) provides “unless otherwise agreed by both the offeror and the recipients in writing, the terms outlined in subsection (a) of this Code section shall be the only terms which can be included in an offer to settle made under this Code section.” Under § 9-11-67.1(c), “nothing in this Code section is intended to prohibit parties from reaching a settlement agreement in a manner and under terms otherwise agreeable to both the offeror and recipient of the offer.” Here, GEICO only accepted “all material terms,” and it specifically agreed to the material terms in accordance with O.C.G.A. § 9-11-67.1(b)(1).
Judge Markle found that section (c) didn’t apply because there was no showing that the parties agreed to add other terms, and GEICO didn’t agree to “assure” the plaintiff that all liability insurance coverage had been disclosed. The statute doesn’t include the language the plaintiff asserted in his offer, and thus GEICO wasn’t bound by it. The plaintiff’s insertion of the requirement that the disclosure “adequately assure” him that the requirements of the statute had been met would render section (a)(3) meaningless, the judge reasoned.
“This requirement is completely subjective and arbitrary, allowing the plaintiff to make a claim that no settlement was reached based solely on his indeterminate satisfaction.”
It undermines the clear language of O.C.G.A. § 9-11-67.1 and the legislative intent to circumvent a plaintiff’s ability to exploit loopholes in the prior versions of the statute.
Accordingly, in providing its written acceptance in accordance with O.C.G.A. § 9-11-67.1(b)(1), GEICO confirmed there were no other terms between the parties, its disclosure was sufficient, and it did all it was required to do to accept the offer of settlement and create a binding settlement agreement. Thus, the Court of Appeals concluded that a binding contract was formed between the parties. The judgment was reversed. Gabrell v. Hancock, 2026 Ga. App. LEXIS 46, 2026 LX 59879 (Ga. App. January 30, 2026).
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