HB220: HB220 Insurance; insurer under a liability policy to pay a third party and the senior lienholder under certain circumstances; provide

Under current Georgia law (O.C.G.A. § 33-7-11.1), insurers that pay benefits directly to a third party for loss of use, towing, and storage costs after an accident already follow certain rules. This bill revises that section so that when an insurer pays a third party for damage to an automobile, it must also pay the senior lienholder of record, meaning the bank or lender with the primary claim on the vehicle, if the insurer prepares the loss estimate itself. The bill also requires the insurer to print a specific warning on that loss estimate telling the recipient that misusing insurance money owed to a lienholder could violate Georgia's theft by conversion law (O.C.G.A. § 16-8-4) and to contact their lending institution with questions. The rule would not apply if the insurer does not prepare the estimate or prepares it outside Georgia. The changes would take effect July 1, 2025, and apply to liability insurance policies issued, delivered, or renewed on or after that date.

• Requires insurers paying a third party for auto damage to also pay the senior lienholder of record, based on ownership records, when the insurer prepares the loss estimate.
• Requires insurers to print a specific written notice on the loss estimate warning about possible violations of Georgia's theft by conversion law (O.C.G.A. § 16-8-4) if insurance money is misused.
• Exempts insurers from these requirements if they do not prepare the loss estimate themselves or if the estimate is prepared outside Georgia.
• Sets the effective date as July 1, 2025, applying to liability insurance policies issued, delivered, or renewed on or after that date.

Insurance companies that issue automobile liability policies in Georgia, third parties who receive damage payments after an accident, lienholders such as banks or lending institutions with a financial interest in a damaged vehicle, and Georgia drivers involved in claims where a vehicle is still under loan.

When a car is damaged and still has a loan on it, this change would help ensure the lender gets paid its share of insurance money rather than only the third party, and would put third parties on notice that misusing those funds could carry legal consequences under Georgia law.

• Section 1 amends O.C.G.A. § 33-7-11.1(c) to require insurers paying a third party for vehicle damage to also pay the senior lienholder of record as their interests appear on ownership records.
• Section 1 requires a specific printed warning on insurer-prepared loss estimates about potential violations of Georgia's theft by conversion statute (O.C.G.A. § 16-8-4).
• Section 1 exempts insurers from the notice requirement if they do not prepare the loss estimate or if it is prepared outside Georgia.
• Section 1 also revises subsection (d) to confirm the Code section applies to liability policies covering loss of use, towing, and storage costs issued on or after January 1, 2009.
• Section 2 sets the effective date as July 1, 2025, applying to policies issued, delivered, or renewed on or after that date.
• Section 3 repeals conflicting laws.

1. 2025-02-05House Second Readers (House)
2. 2025-02-04House First Readers (House)
3. 2025-02-03House Hopper (House)

• Martin Momtahan (R, HD-017)Primary sponsor
• Kasey Carpenter (R, HD-004)
• Stan Gunter (R, HD-008)
• Kimberly New (R, HD-040)

• auto insurance
• lienholders
• insurance claims
• liability insurance