Minnesota Says American Family, Bristol West Refused to Pay 3rd Party Auto Claims

Minnesota Commerce Commissioner Mike Rothman has fined two insurance companies for violating state consumer protection laws by refusing to pay auto accident claims for damage caused by drivers they insured.

In recent consent orders with the Commerce Department, American Family Mutual Insurance Co. was fined $25,000 and Bristol West Casualty Insurance Co. (owned by Farmers Insurance Group) was fined $20,000 for their refusal to pay third-party insurance claims.

The companies are also required to take corrective actions to ensure that claims are handled in compliance with Minnesota consumer protection laws.

The Commerce Department investigation found significant compliance concerns with 41 of American Family’s third-party claims in 2014-2016 and seven of Bristol West’s third-party claims in 2015-2016. After the Commerce Department intervened, the companies re-opened and re-adjusted the claims.

Under Minnesota law, an insurer or adjuster is not allowed to deny a liability claim because its insured driver has not cooperated, unless an independent evaluation of available evidence indicates there is no liability.