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How Does Minnesota’s Good Faith Law Affect Your Car Accident Insurance Claim?

by Sep 27, 2022Cassandra Bautista, Personal Injury

After a car accident with an uninsured driver, or when you are the victim of a hit and run, you may need to file a claim with your own insurance company to recoup the money you’ve spent on accident-related expenses. We all hope that our insurance will be there when we need it, ready to step up and pay out a reasonable claim. But policyholders in some states have been let down by insurance when their legitimate claim is denied. Luckily for Minnesotans, Good Faith laws help protect policyholders in our state.

What Is A Good Faith Law?

A Good Faith law is a law that makes it more difficult for insurance companies to deny claims. This is beneficial to victims of car accidents and other personal injury cases, who rely on insurance payouts to cover their accident-related expenses. Minnesota auto insurance laws dictate how insurance companies must act in good faith if they are denying a claim. This means that the insurance company must provide a “reasonable basis” for denying the claim. The same applies to a situation where the company is reducing the claim amount. If insurance does not provide a reasonable basis, the policyholder can fight the decision in court. Any policyholder that wins their case may be able to collect damages and attorney’s fees in addition to having their claim honored by the insurance company.

How Do Good Faith Laws Benefit Accident Victims?

Without Good Faith laws in place, insurance companies have the freedom to deny a claim for nearly any reason. This disadvantages personal injury in MN accident victims who depend on reimbursement from insurance to cover medical bills, property damage, and the other effects of the accident. 

Victims who file a claim with their own insurance company may do so because they were involved in a hit and run or an accident with an uninsured driver. Minnesota car insurance laws dictate that every driver in Minnesota must have uninsured motorist coverage so they will be covered financially in this situation. But that doesn’t mean insurance companies always cooperate. If you take insurance to court over a denial, the judge will consider whether the insurance company acted in “reckless disregard of the good faith laws or in their investigation of the claim.”

Minnesota Personal Injury Attorneys

Working with a personal injury attorney is one of the best ways to ensure your insurance company doesn’t deny your legitimate claim. Car accident lawyers in Minnesota help their clients document the accident and collect evidence, such as the police report and witness statements. When you provide overwhelming evidence in your favor, it is nearly impossible for insurance to get away with denying your claim. 

Do you need help fighting for compensation after a car accident? Contact Sieben Edmunds Miller’s personal injury team here.

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