Uninsured and Under Insured Insurance

Many Minnesotans find themselves the victims of car accidents with uninsured drivers or drivers without enough insurance to compensate them for their losses.

Your auto insurance affords you protection for this situation. 

Minnesota's Legislature has recently strengthened your rights when making Uninsured and Under Insured claims.

Minnesota's new law states in part:

604.18 INSURANCE STANDARD OF CONDUCT
Subd. 2. Liability.

(a) The court may award as taxable costs to an insured against an insurer amounts as provided in subdivision 3 if the insured can show:

(1) the absence of a reasonable basis for denying the benefits of the insurance policy; and

(2) that the insurer knew of the lack of a reasonable basis for denying the benefits of the insurance policy or acted in reckless disregard of the lack of a reasonable basis for denying the benefits of the insurance policy.

This law helps to encourage insurance companies to deal with their insured's in good faith.

When insurance companies try to take advantage of their insured's, they will be exposing themselves to damages that were not previously actionable in Minnesota.

This new law would have helped my client in his 2006 trial.  In that case, a 44-year-old bricklayer, was seriously injured in a car accident.  He settled his claim against the driver, who was underinsured, for $95,000, and collected another $40,000 in no-fault benefits. 

Having suffered injuries to his femur necessitating a future hip replacement and causing recurring health issues, Nelson asked his insurer to pay the $100,000 in underinsured motorist benefits provided for in his auto policy.  The insurance company initially offered to pay half, ultimately upping its offer to $75,000 just before trial.  Rather than settling the case for $25,000 less than he thought he was entitled to, Nelson opted to go to trial.  After hearing the facts, the jury returned a verdict for $793,000. 

Despite the highly favorable trial result, the insurer had to pay just $120,000 - the $100,000 policy limit, plus another $20,000 in taxable costs.  

Today, Minnesota law provides a remedy for injured people in this situation:

Subd. 3. Damages and costs.

(a) In addition to prejudgment and postjudgment interest and costs and disbursements allowed under law, the court may award an insured the following taxable costs for a violation of subdivision 2:

(1) an amount equal to one-half of the proceeds awarded that are in excess of an amount offered by the insurer at least ten days before the trial begins or $250,000, whichever is less; and

(2) reasonable attorney fees actually incurred to establish the insurer's violation of this section.

 These damages and costs are a major victory for injured victims of car collisions with underinsured and uninsured drivers.  This new statute gives remedies to victims who struggle to get their own insurance companies to honor claims.

Jeff Sieben
Sieben, Grose, Von Holtum & Carey
(612) 333-9713
Cell Phone  (651) 336-1925