Minnesota Insurance Law Claims

In 2008, Minnesota adopted a statute that allows people who are insured to sue their insurance company if the insurer denies coverage for a claim in bad faith.   The law brought Minnesota law into accord with the law of the majority of other states.

What does the bad faith law do?

Imagine that you, your spouse, and your two children are in a car accident.  Tragically one of your children is killed in the accident.  The other driver only has $30,000 of insurance coverage.  While it is difficult to place a monetary value on the life of your child, you can certainly agree it is worth more than $30,000.  You file a claim with your own underinsured motorist coverage.  For some incomprehensible reason, your insurance company denies the claim.  Now you not only have the tragedy of being in a serious accident and losing a child, but you are also battling your own insurance company.

The new law in Minnesota makes your insurance company accountable if it denies a claim without a good faith basis to do so.  It also allows the insured to recover attorney’s fees incurred in pursuing the case.  Insurance companies have a legitimate interest in investigating claims and preventing insurance fraud, but they also have a duty to treat the people who purchase their insurance fairly.  The statute requires insurance companies to promptly investigate claims and make reasoned coverage decisions.  One would think that this would be standard conduct for insurance companies, but unfortunately that has not always been the case.

Why do we need an insurance conduct statute?

In recent years, insurance companies have substantially changed their operating procedures.  They have increased premiums while cutting coverage.  Every day the company can hold onto its funds is another day to invest and earn interest on those funds.  Insurance companies have a powerful incentive to delay paying claims and to minimize the amount they will pay for claims.  The result has been policyholders with legitimate claims who have been left holding the bag.

Contact a Minnesota Insurance Lawyer

If your insurance company has not handled your claim appropriately, you may wish to contact an attorney.  The experienced advocates at Twin Cities Law Firm can help you negotiate with your insurance company and can pursue a bad faith claim if your company has violated the statute.  Contact us today.