A hearing was held before the Commerce and Regulatory Reform Committee of the Minnesota House of Representatives yesterday on HF 2553, a bill misidentified as relating to “wealth-related claims” rather than “weather-related claims”. This oversight, if that is actually what it was and not an intention to disguise the true nature of the bill, made it difficult for all concerned to determine before the hearing that the bill was actually of interest to storm damage renovation contractors. Luckily, we became aware of this bill’s true intention the day before the hearing and were in attendance at yesterday’s hearing.
The bill was introduced by the committee chair, Representative Hoppe, and it was clearly supported by, and likely drafted by, the Insurance Federation of Minnesota. The only testimony in support of the bill was that of the Insurance Federation of Minnesota through its president, Bob Johnson, and one witness, Ken Ohl, an independent insurance agent from Spicer, Minnesota.
In a nutshell, the testimony in favor revolved around the fact that Minnesota has become a state with one of the highest total weather related insurance claim losses in the nation. The insurers are bleeding red ink paying out these claims. The cause is the weather. The solution, from the original bill, is to raise insurance premiums and deductibles for policy holders and prohibit contractors from speaking with any insurance company representative until after the insurance claim has been accepted by the insurer. As stated in our prior post, contractors are muzzled!
Thankfully for contractors, they were well represented in the hearing room. Except for the suits in the room (who were likely insurer support types or in attendance on other bills), the room was packed with contractors. As one point, after Representative Atkins indicated that the bill may be unnecessary given current law, the room broke out in deafening clapping by all the contractor support.
Many contractors testified in opposition to the bill. They included: Todd Fultz of Hail Pros, Phil Simon of Simon Construction, Trevor Foss of Foss Exteriors and Jim Dvorak, DSS Exteriors, and Chairman of the Minnesota Association of Exterior Specialists, among others. The general nature of the testimony was that muzzling contractors will result in a longer claim settlement process, result in insureds receiving insufficient funds from their claims to pay for the actual costs of repair, result in more low-ball insurance claim settlements being accepted by insureds who have insufficient information as to the scope and cost of repair, and force insureds to hire costly appraisers, public adjusters and attorneys to assist them with expertise that contractors previously provided at no additional cost. In short, the bill is an anti-consumer bill that would hurt Minnesota policy holders.
Well, the Committee listened to the contractors and it nearly appeared that the bill would be tabled to die in committee. At the last minute, when it looked like victory was had, Representative Hoppe reached a gentleman’s agreement with Representative Atkins that Representative Hoppe would agree that, if the Committee passed the bill to the House floor, it would not be further seen again unless it had the support of both the Insurance Federation and contractors. With that in place, the bill passed out of Committee, as amended.
What was the amendment you ask? The attempt to allow for insurance premium and deductible increases to insureds was removed from the bill and the bill was re-identified as a “weather-related claims practices” matter rather than a “wealth-related claims practices” matter. The part about muzzling contractors remained intact.
In summary, contractors won a battle in their war to help Minnesota consumers; however, the war continues and this attack by insurers to muzzle contractors will likely reappear in this legislative session.
