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Arbitration Process Considered as Part of Minnesota Insurance Overhaul

Wednesday, April, 13, 2011

An arbitration process for injury claims related to auto accidents is one of the changes Minnesota lawmakers are considering as they examine the state's no-fault insurance system.  The change, according to some state legislators, will result in reduced costs.  The Senate Committee on Commerce and Consumer Protection heard argument on the issue on Tuesday.


Under the no-fault system currently in force, auto insurance companies pay accident claims no matter who is to blame for the injuries that occurred in a crash.  Hospital and ambulance providers approve of this system since it gives them some security that bills will be paid promptly and in full.  Any change to the system could result in delays in payment while fault determinations are made.  In the case of injury victims who lack health insurance, it would mean that hospitals would have to absorb the costs of care and treatment.


Arbitration is Designed to Reduce Overcharging


One argument in favor of implementing an arbitration process as part of repealing the no-fault law is that the use of arbitration has the potential to reduce any overcharging for the medical care accident victims may need.  Trial lawyers, who might lose business to arbitration attorneys if the change goes through, are expected to oppose any alterations to the system as it currently stands.  The no-fault law was intended to prevent lawsuits, but it allows victims to go to court to recoup losses due to pain and suffering, whenever their medical bills exceed $4000.