What Is the “Tender” Requirement in a Georgia UM/UIM Case?

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It is the rule that, before you can recover uninsured/underinsured motorist (UM) benefits from your own carrier in a lawsuit, you must exhaust the at-fault driver’s available liability coverage, usually by settling for that policy’s full limits. O.C.G.A. § 33-24-41.1(a) lets a liability carrier “tender, and the claimant … accept, the limits of such policy”. The exhaustion rule itself comes from court decisions: in Cravens v. Slaughter (2026), the Supreme Court of Georgia traced it to Daniels v. Johnson (1998), noted that § 33-24-41.1 “does not set forth an exhaustion requirement”, and held that the rule does not stop you and your UM carrier from settling the UM claim before the liability claim is resolved. A UM policy can still make exhaustion a condition of coverage. When the at-fault vehicle carries no liability coverage, or the driver cannot be identified, there are no liability limits to exhaust; those claims are covered in how UM coverage works for a hit-and-run. Settling the liability claim for less than the limits, or signing the wrong kind of release, can end a UM lawsuit.

What exhaustion requires

In Farid v. Gaskell (2022), the Court of Appeals restated three rules from its 2007 decision in Holland v. Cotton States Mutual Insurance Co.:

Rule, as quoted in Farid from Holland What it means for a settlement
"Exhausting available liability coverage is a condition precedent to a UM claim". The liability limits come first
"A carrier must offer and a claimant must accept an amount equal to the limit stated in the policy, not an amount less than the limit stated in the policy". A discount below the limits does not exhaust
"A claimant may seek recovery under a UM policy when the claimant's damages exceed the limits of the tortfeasor's liability policy, after first recovering those liability limits from the tortfeasor through settlement". UM coverage applies to the damages above the limits

These rules come from cases in which the injured person sued the UM carrier. Cravens held that they do not govern a settlement of the UM claim, and it left open whether the lawsuit rule was correctly decided.

How Farid lost his UM claim

Farid and his two children were hurt on Interstate 75 in Cobb County when a tractor trailer changed lanes, struck another car, and that car struck Farid’s vehicle, which overturned. The trucking company’s motor carrier policy had a $1,000,000 limit. Farid settled with the trucking company, the driver, and the insurer for $450,000, and the settlement agreement had “the effect of a General Release” as to the insurer. His UM carrier then won summary judgment, and the Court of Appeals affirmed for two reasons:

  1. Less than the limits. $450,000 was “well short” of the $1,000,000 limit, so the coverage was not exhausted.
  2. A general release. The court cited its 1997 decision in Rodgers v. St. Paul Fire & Marine Insurance Co., which held that when a general release is signed in favor of an uninsured motorist (the at-fault driver), the UM carrier is “also released as a matter of law because of the derivative nature of the insurance company’s liability”, as Farid quotes it.

Farid also argued that the truck was really uninsured, so there were no limits to exhaust. The court rejected that argument because nothing in the record established that the truck was uninsured as § 33-7-11 defines the term.

The limits demand and the 2024 settlement-offer statute

The other side of tender is the demand that asks the liability insurer to pay its limits. The Supreme Court of Georgia held in First Acceptance Insurance Co. of Georgia v. Hughes (2019) that “an insurer’s duty to settle arises only when the injured party presents a valid offer to settle within the insured’s policy limits”. Hughes quotes Cotton States Mutual Insurance Co. v. Brightman (2003): “An insurance company may be liable for the excess judgment entered against its insured based on the insurer’s bad faith or negligent refusal to settle a personal claim within the policy limits”. Under Southern General Insurance Co. v. Holt (1992), also quoted in Hughes, the jury generally decides whether the insurer gave the insured “the same faithful consideration it gives its own interest”. In Hughes itself, the offer had no deadline, so the insurer did not act unreasonably by failing to accept it before the injured parties withdrew it.

For motor vehicle collision claims, O.C.G.A. § 9-11-67.1 now controls how that offer is made. In 2024, Senate Bill 83 rewrote the statute. The bill as passed provides that:

  • Any offer to settle a motor vehicle collision injury or death claim “shall be an offer to enter into a bilateral contract”.
  • An attorney-prepared offer made between accrual of the claim and the defendants’ answers must be in writing and contain only listed material terms, including an acceptance date not less than 30 days from receipt, a payment date not less than 40 days from receipt, the amount, the parties and claims to be released, the type of release, and a sworn statement of the recipient’s insurance coverage (which the offeror may waive).
  • The offer must include medical or other records sufficient to evaluate the claim, and it must be sent by certified mail or statutory overnight delivery, return receipt requested.
  • Seeking to modify a material term is not a “clarification”.
  • A safe harbor bars a failure-to-settle suit when the recipient, by the dates in the offer, accepts the material terms in writing (other than the amount), provides any required sworn coverage statement, and pays the lesser of the amount demanded or the available bodily injury limits.
  • The section does not apply to an offer to settle a product liability claim, including a failure to warn claim.

The 2024 legislative summary of the session’s acts describes the same content. The starting date is unsettled. The act says it applies to offers made on or after the date the Governor approved it, April 22, 2024. In Gomez v. USAA Casualty Insurance Co. (2026), the Court of Appeals held that the statute nonetheless became effective July 1, 2024, under the default rule of O.C.G.A. § 1-3-4(a)(1), noted the conflict with the act’s stated date of application, and left that conflict for another day. For an offer made between April 22 and July 1, 2024, which version governs is an open question.

Earlier offers fall under the 2021 version of the statute, which applied to causes of action arising from the use of a motor vehicle on or after July 1, 2021. Gomez held that the 2021 version applies to all offers made before an answer is filed, including offers made before any lawsuit, and that an offer’s statement that the statute did not apply did not prevent a binding settlement once the insurer accepted the statutory material terms.

Before settling with the liability insurer

  1. Confirm the exact liability limits available, from the declarations page or the sworn coverage statement.
  2. Compare the settlement amount with those limits: under Farid, an amount below the limits does not exhaust the coverage.
  3. Read the release: a general release of the at-fault driver can release the UM carrier too.
  4. Serve the UM carrier as § 33-7-11(d) requires when you sue a known driver whose vehicle you reasonably believe is uninsured under the statute.
  5. If the UM carrier is willing to settle before the liability claim is resolved, read the UM policy for an exhaustion condition; after Cravens, Georgia case law does not by itself bar that settlement.

How UM limits are calculated once the liability coverage is exhausted is explained in how UM coverage and stacking work in Georgia.

Sources

General information about Georgia law as of October 2026. It is not legal advice, and reading it does not create an attorney-client relationship.

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