SF 74

as introduced - 90th Legislature (2017 - 2018) Posted on 01/12/2017 08:45am

A bill for an act
relating to commerce; requiring rental car reimbursement for automobile damage
claims; amending Minnesota Statutes 2016, section 72A.201, subdivision 6.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 72A.201, subdivision 6, is amended to read:

Subd. 6.

Standards for automobile insurance claims handling, settlement offers,
and agreements.

In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the
following acts by an insurer, adjuster, or a self-insured or self-insurance administrator
constitute unfair settlement practices:

(1) if an automobile insurance policy provides for the adjustment and settlement of an
automobile total loss on the basis of actual cash value or replacement with like kind and
quality and the insured is not an automobile dealer, failing to offer one of the following
methods of settlement:

(a) comparable and available replacement automobile, with all applicable taxes, license
fees, at least pro rata for the unexpired term of the replaced automobile's license, and other
fees incident to the transfer or evidence of ownership of the automobile paid, at no cost to
the insured other than the deductible amount as provided in the policy;

(b) a cash settlement based upon the actual cost of purchase of a comparable automobile,
including all applicable taxes, license fees, at least pro rata for the unexpired term of the
replaced automobile's license, and other fees incident to transfer of evidence of ownership,
less the deductible amount as provided in the policy. The costs must be determined by:

(i) the cost of a comparable automobile, adjusted for mileage, condition, and options,
in the local market area of the insured, if such an automobile is available in that area; or

(ii) one of two or more quotations obtained from two or more qualified sources located
within the local market area when a comparable automobile is not available in the local
market area. The insured shall be provided the information contained in all quotations prior
to settlement; or

(iii) any settlement or offer of settlement which deviates from the procedure above must
be documented and justified in detail. The basis for the settlement or offer of settlement
must be explained to the insured;

(2) if an automobile insurance policy provides for the adjustment and settlement of an
automobile partial loss on the basis of repair or replacement with like kind and quality and
the insured is not an automobile dealer, failing to offer one of the following methods of
settlement:

(a) to assume all costs, including reasonable towing costs, for the satisfactory repair of
the motor vehicle. Satisfactory repair includes repair of both obvious and hidden damage
as caused by the claim incident. This assumption of cost may be reduced by applicable
policy provision; or

(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle.
Satisfactory repair includes repair of obvious and hidden damage caused by the claim
incident, and includes reasonable towing costs;

(3) regardless of whether the loss was total or partial, in the event that a damaged vehicle
of an insured cannot be safely driven, failing to exercise the right to inspect automobile
damage prior to repair within five business days following receipt of notification of claim.
In other cases the inspection must be made in 15 days;

(4) regardless of whether the loss was total or partial, requiring unreasonable travel of
a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, to
allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made
pursuant to policy requirements, or to have the automobile repaired;

(5) regardless of whether the loss was total or partial, deleted text begin if deleted text end new text begin failing to assume all costs for new text end
loss of use deleted text begin coverage exists under the insurance policy, failing to notify an insured at the
time of the insurer's acknowledgment of claim, or sooner if inquiry is made, of the fact of
the coverage, including the policy terms and conditions affecting the coverage and the
manner in which the insured can apply for this coverage deleted text end new text begin of the automobile, including rental
car reimbursement new text end ;

(6) regardless of whether the loss was total or partial, failing to include the insured's
deductible in the insurer's demands under its subrogation rights. Subrogation recovery must
be shared at least on a proportionate basis with the insured, unless the deductible amount
has been otherwise recovered by the insured, except that when an insurer is recovering
directly from an uninsured third party by means of installments, the insured must receive
the full deductible share as soon as that amount is collected and before any part of the total
recovery is applied to any other use. No deduction for expenses may be made from the
deductible recovery unless an attorney is retained to collect the recovery, in which case
deduction may be made only for a pro rata share of the cost of retaining the attorney. An
insured is not bound by any settlement of its insurer's subrogation claim with respect to the
deductible amount, unless the insured receives, as a result of the subrogation settlement,
the full amount of the deductible. Recovery by the insurer and receipt by the insured of less
than all of the insured's deductible amount does not affect the insured's rights to recover
any unreimbursed portion of the deductible from parties liable for the loss;

(7) requiring as a condition of payment of a claim that repairs to any damaged vehicle
must be made by a particular contractor or repair shop or that parts, other than window
glass, must be replaced with parts other than original equipment parts or engaging in any
act or practice of intimidation, coercion, threat, incentive, or inducement for or against an
insured to use a particular contractor or repair shop. Consumer benefits included within
preferred vendor programs must not be considered an incentive or inducement. At the time
a claim is reported, the insurer must provide the following advisory to the insured or claimant:

"You have the legal right to choose a repair shop to fix your vehicle. Your policy will
cover the reasonable costs of repairing your vehicle to its pre-accident condition no matter
where you have repairs made. Have you selected a repair shop or would you like a referral?"

After an insured has indicated that the insured has selected a repair shop, the insurer
must cease all efforts to influence the insured's or claimant's choice of repair shop;

(8) where liability is reasonably clear, deleted text begin failing to inform the claimant deleted text end in an automobile
property damage liability claim deleted text begin that the claimant may have a claim for loss of use of the
vehicle deleted text end new text begin , failing to assume all costs of the claimant for loss of use of the automobile, including
rental car reimbursement new text end ;

(9) failing to make a good faith assignment of comparative negligence percentages in
ascertaining the issue of liability;

(10) failing to pay any interest required by statute on overdue payment for an automobile
personal injury protection claim;

(11) if an automobile insurance policy contains either or both of the time limitation
provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the insured
in writing of those limitations at least 60 days prior to the expiration of that time limitation;

(12) if an insurer chooses to have an insured examined as permitted by section 65B.56,
subdivision 1, failing to notify the insured of all of the insured's rights and obligations under
that statute, including the right to request, in writing, and to receive a copy of the report of
the examination;

(13) failing to provide, to an insured who has submitted a claim for benefits described
in section 65B.44, a complete copy of the insurer's claim file on the insured, excluding
internal company memoranda, all materials that relate to any insurance fraud investigation,
materials that constitute attorney work product or that qualify for the attorney-client privilege,
and medical reviews that are subject to section 145.64, within ten business days of receiving
a written request from the insured. The insurer may charge the insured a reasonable copying
fee. This clause supersedes any inconsistent provisions of sections 72A.49 to 72A.505;

(14) if an automobile policy provides for the adjustment or settlement of an automobile
loss due to damaged window glass, failing to provide payment to the insured's chosen vendor
based on a competitive price that is fair and reasonable within the local industry at large.

Where facts establish that a different rate in a specific geographic area actually served by
the vendor is required by that market, that geographic area must be considered. This clause
does not prohibit an insurer from recommending a vendor to the insured or from agreeing
with a vendor to perform work at an agreed-upon price, provided, however, that before
recommending a vendor, the insurer shall offer its insured the opportunity to choose the
vendor. If the insurer recommends a vendor, the insurer must also provide the following
advisory:

"Minnesota law gives you the right to go to any glass vendor you choose, and prohibits
me from pressuring you to choose a particular vendor.";

(15) requiring that the repair or replacement of motor vehicle glass and related products
and services be made in a particular place or shop or by a particular entity, or by otherwise
limiting the ability of the insured to select the place, shop, or entity to repair or replace the
motor vehicle glass and related products and services;

(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or
inducement for or against an insured to use a particular company or location to provide the
motor vehicle glass repair or replacement services or products. For purposes of this section,
a warranty shall not be considered an inducement or incentive; or

(17) failing to inform an insured making a claim under collision or comprehensive
coverage, that includes rental vehicle reimbursement coverage, of the insured's right to
select any rental vehicle company. If the insurer recommends a rental vehicle company to
the insured, the insurer must also provide the following advisory: "Minnesota law gives
you the right to choose any rental vehicle company, and prohibits me from requiring you
to choose a particular vendor."