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HB 220

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

2025-2026 Regular Session Introduced by Kasey Carpenter and 3 co-sponsors

House Bill 220 requires insurers to pay both third parties and senior lienholders for auto damages, ensuring fair compensation and protecting lienholder interests.

House Second Readers
#insurance
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WeVote Research Nonpartisan
Bill Summary · HB 220

Summary of House Bill 220

Bill Number: HB 220
Title: Insurance; insurer under a liability policy to pay a third party and the senior lienholder under certain circumstances; provide
Status: House Second Readers
Introduced: February 03, 2025
Classification: Bill

Purpose and Intent

House Bill 220 aims to amend the Official Code of Georgia Annotated to clarify the obligations of insurers under liability insurance policies. Specifically, the bill mandates that insurers must pay both third parties and senior lienholders when making payments for damages related to automobile losses. This legislation seeks to protect the interests of lienholders while ensuring that third parties receive compensation for their losses.

Key Provisions

The bill introduces several important changes to existing law:

  1. Payment Obligations:

    • Insurers are required to make payments to both the third party (e.g., an individual or entity that suffered damage) and the senior lienholder of record when compensating for automobile damage.
    • The payment must reflect the interests of both parties as recorded in ownership documents.

  2. Loss Estimate Notification:

    • If the insurer prepares a loss estimate, it must include a notification stating that failure to use the insurance proceeds according to a security agreement with a lienholder may violate Georgia law (specifically, Code Section 16-8-4).

  3. Applicability:

    • The provisions apply to all automobile liability or motor vehicle liability insurance policies that pay benefits to third parties on behalf of an insured for loss of use, towing, and storage costs.
    • This applies to policies issued, delivered, or renewed in Georgia on or after January 1, 2009.

Affected Parties

  • Insurers: Insurance companies providing automobile liability coverage will need to adjust their payment processes to comply with the new requirements.
  • Third Parties: Individuals or entities that suffer damages to their vehicles will benefit from guaranteed payments.
  • Senior Lienholders: Financial institutions or entities that hold liens on vehicles will have their interests protected through mandatory payments.

Effective Date and Implementation

  • The provisions of HB 220 will become effective on July 1, 2025.
  • The bill will apply to all liability insurance policies issued, delivered, or renewed in Georgia on or after this date.

Conclusion

House Bill 220 is designed to enhance the protection of both third parties and senior lienholders in the context of automobile liability insurance. By establishing clear payment obligations for insurers, the bill aims to ensure fair compensation and compliance with existing security agreements. The bill is currently under consideration in the Georgia House and has passed the first and second readings as of early February 2025.

Compiled from official sources — confirm details with the bill’s official record.

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