Insurance Company Acting In Bad Faith? New Remedy!
by Steven M. Bialick, Attorney at Law
A new Minnesota statute took effect on August 1, 2008, which could help if your motorcycle insurance company denies benefits without a reasonable basis. Under some circumstances, Minnesota Statutes section 604.18 allows an insured individual to seek up to $250,000 over and above the proceeds awarded in a lawsuit, plus reasonable attorney fees of up to $100,000 incurred to establish an insurance company’s violation of that statute, if the insurance company unreasonably denies insurance benefits.
A hypothetical example will illustrate how Minnesota Statutes section 604.18 could work: Bill had elected to have $50,000 of Uninsured Motorist coverage under his motorcycle insurance policy. He was rear-ended by an uninsured motorist while riding his motorcycle and was injured. He tried to settle his Uninsured Motorist claim with his motorcycle insurance company for $50,000. However, without a good reason, his insurance company only offered to pay him $10,000. He sued his insurance company and received a $50,000 jury verdict. In addition to the $50,000 which was awarded by the jury, Bill was allowed to recover an additional $20,000; which was equal to 50% of the amount the jury verdict exceeded the amount his insurance company had offered ($50,000 verdict, minus $10,000 offer is $40,000, times 50% equals $20,000). Bill was also awarded attorney fees he incurred in obtaining the additional $20,000.
Minnesota Statutes section 604.18 helps encourage insurance companies to act reasonably.
As this example also illustrates, it is a good idea to elect to have Uninsured and Underinsured motorist coverage in your motorcycle insurance policy. With today’s economy, there are an increasing number of Uninsured and Underinsured drivers. In Minnesota, Uninsured and Underinsured motorist insurance coverages are required on cars but are optional on motorcycles.
Steven M. Bialick has been in the private practice of law since 1980. He practices in the area of personal injury and accident cases, and his office is located in the Minneapolis suburb of St. Louis Park, Minnesota.
This article is intended to provide general information only, and is not legal advice or a legal opinion on any certain facts or circumstances. Readers are encouraged to consult with an attorney on any specific legal questions or matters.