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By Associated Press, Grand Forks Herald, N.D.
Mar. 28--ST. PAUL -- Legislation giving consumers a stronger case to sue their insurance companies over denied claims cleared the Minnesota House on Thursday.
The House voted 81-51 for the so-called "good faith" bill, after adopting changes to make it more like the Senate version approved last week. Dubbed "bad faith" by opponents, the proposal has drawn legislators, lobbyists and lawyers into a high-stakes, fine-print debate over consumer rights and insurance premiums.
The bill would make it easier for policyholders to sue home and auto insurers over delayed or denied claims. They would have to show that the claim was reasonable and the insurer knew it or acted recklessly -- in other words, a failure to act "in good faith."
In such cases, a court could force the insurance company to pay attorneys' fees and other costs.
Rep. Joe Atkins, the bill's House sponsor, said the policy would force insurers to settle reasonable claims up front, instead of opening with a low offer and making the policyholder choose between taking it or spending their own money to sue for more. He said it would reduce lawsuits and shouldn't affect premiums.
Several Republicans predicted the bill would do the exact opposite -- unleash lawsuits and push up premiums as insurers spread out the cost of more litigation and higher settlements.
"I'm wondering if we're trying to fix something that doesn't need to be fixed at the cost of our consumers," said Rep. Sarah Anderson, R-Plymouth.
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Car Insurance News: House OKs Easing Insurance Lawsuits...Get an auto insurance quote!