MichiganRadio

House OKs Tougher Penalties for Wrongful Insurance Claim Denials ANN ARBOR, MI (Michigan Radio) - The Michigan House has passed a package of bills that would increase penalties for insurance companies that wrongfully deny claims.

The House bills target home, auto, casualty, commercial property and worker's compensation insurers.

Penalties for denying valid claims would range from 100 thousand dollars to 500 thousand dollars.

Representative Barb Byrum says the package also calls for a one million dollar fine for CEOS who create a culture of wrongfully denying claims.

"A CEO was quoted not too long ago that regardless of what you do on the front side of insurance, the only way to make money is to attack claims, and to deny claims, and delay them," Byrum says.

The insurance industry warns that consumers will likely have to pay more for their coverage if the Michigan Senate approves the bills.

They say the legislation would lead to more lawsuits and higher insurance rates.
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