Minnesota Session Laws - 1992, Regular Session

  

                         Laws of Minnesota 1992 

                        CHAPTER 413-S.F.No. 1997 
           An act relating to insurance; providing for automobile 
          insurance policy coverage on the repair or replacement 
          of motor vehicle glass; amending Minnesota Statutes 
          1991 Supplement, section 72A.201, subdivision 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1991 Supplement, 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, if 
loss of use 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; 
      (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; 
       (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; 
       (8) where liability is reasonably clear, failing to inform 
the claimant in an automobile property damage liability claim 
that the claimant may have a claim for loss of use of the 
vehicle; 
       (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 assume all reasonable costs sufficient to pay the 
insured's chosen vendor for the repair or replacement of 
comparable window glass at a price generally available in the 
area.  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; 
    (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; or 
    (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. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment. 
    Presented to the governor April 3, 1992 
    Signed by the governor April 7, 1992, 2:53 p.m.