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Insurers like delays

For an insurance company, delays are always good. Especially when they already have your money. Which they do. If you fail to pay a premium on time, they can cancel your policy and refuse to pay any claims made after they claim your policy was no longer in place. However, if you have a loss, they can delay payment for months or years, often for invalid or illegal reasons. 

To prevent this, there are what are known as "bad faith" suits, where insurers can be sued for intentionally failing to pay a valid claim. But, again, these suits take time, and if you are a Minnesota homeowner and your property suffered damage in a storm, you may not have time to wait before you repair the damage.

In one state, Texas, insurers are attempting to further weaken the protection homeowners have from unscrupulous insurance companies. They have introduced a bill in the legislature that reduces penalties insurers face for slow payment of claims and forces many claims into clogged calendars of federal courts.

By further slowing down the payment of claims, it would place more pressure on homeowners and force them to settle their disputes. And it is not as if these insurers are going out of business due to excessive litigation. In a five-year period, they made $4.5 billion in profits just in that state alone.

While insurers like to portray themselves as businesses struggling to survive, they control billions of dollars of assets in this country. The reason they often face significant financial penalties is because smaller penalties are ineffective in changing their habits and forcing them to treat their policyholders fairly.

Minnesota homeowners should carefully watch any bills in our legislature and hold accountable any legislators who introduce or support such unfair laws.

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