HB 220: 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), when an insurance company pays a third party for damage to an automobile, it must print a notice on the repair estimate warning that misusing the insurance money instead of paying off a car loan could violate Georgia's theft-by-conversion law. This bill adds a new requirement: the insurer must actually pay both the third party and the senior lienholder of record together, based on how ownership interests appear in the vehicle's records, whenever it pays a third party for damage to an automobile. The change applies only to the payment procedure in subsection (c) of the existing law; the notice language and the rest of the statute stay the same. The bill would take effect July 1, 2025, and would apply to all liability insurance policies issued, delivered, or renewed in Georgia on or after that date.

• Requires insurers paying a third party for automobile damage to also pay the senior lienholder of record, if one exists, based on ownership records.
• Keeps the existing requirement that insurers print a warning notice about misusing insurance proceeds on loss estimates they prepare directly.
• Leaves the rest of the underlying law about towing, storage, and loss-of-use payments to third parties unchanged.
• Sets a July 1, 2025 effective date applying to all liability insurance policies issued, delivered, or renewed in Georgia on or after that date.

Insurance companies that issue automobile liability policies in Georgia, third parties who receive damage payments from another driver's insurer, and lienholders such as banks or finance companies that hold loans on vehicles involved in accidents.

Lienholders currently risk being left out when an insurer pays a third party directly for car damage, which can leave a loan partially unsecured if the money isn't used for repairs or paid toward the loan. Requiring joint payment helps ensure lenders are paid alongside the third party.

• Section 1 amends O.C.G.A. § 33-7-11.1(c) to require insurers to pay both the third party and the senior lienholder of record, as their interests appear, when compensating for automobile damage.
• Section 1 retains the existing requirement to print a statutory warning notice on loss estimates the insurer prepares directly in Georgia.
• Section 1 leaves subsection (d) unchanged, keeping the law applicable 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 any 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)

• car insurance
• auto liability policies
• lienholder rights
• insurance regulation