This Action filed by the insured against insurer to recover benefits allegedly due under the terms of an insurance contract are called first party claims. This means that insured under party to the contract suffered a loss for which he contends that the insurance contract provides coverage. And it is therefore action on a contract in which the insured alleges a breach of the contractual obligations of the insurer and that the insured is entitled to recover all benefits provided for in the insurance contract for loss or injury suffered by the insured.Except as provided by statute or motor vehicle liability policy it 3rd party seeking recovery for the liability of the insured is without standing to file an direct action against the insurer until a judgment is obtained against the insured. Where the injured party has obtained a judgment against the insured and thereby fixes of the liability insured than the general rule is no longer applicable and the injured party may sue the liability insurer directly to recover the proceeds available under the liability coverage of the insurance policy. A party to any insurer to collect an unsatisfied judgment entered against its insured must first establish its right to recover under the contract between the insurer and the insured. The rights of the judgment creditor to recover on an insurance contract depend on the terms of the insurance contract and are no greater than those rights granted by the contract and intended by the parties.
Another direct action which may be pursued against a liability insurer is a garnishment action. But this is only available after the injured party has reduced his claim to judgment. As the judgment creditor the injured claimant may file a garnishment action against a liability insurer on the premise that the insurer as garnishee is liable for payment of the judgment. Except in the case of third-party statutory bad faith claims for property damage,an injured party is not entitled to recover bad faith penalties against the tortfeasor's liability insurer, even though the insurer wrongfully refused to make payment under the terms of the liability policy then due. This is because bad faith penalties may only be recovered by an insured against his own insurer. An injured 3rd party is not an insured under the terms of a liability policy and thus does not qualify as a party entitled to penalties. Contact a Paulding County attorney today.