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Bill Would Ban Zero-Dollar Claims in Underwriting

Bill Would Ban Zero-Dollar Claims in Underwriting
January 11, 2017

The Montana Senate is considering a bill that would ban insurance companies from using information about zero-dollar claims in making underwriting decisions that ultimately affect cancellations, renewals and rates of insurance policies. Insurance companies can cancel policies or raise rates on customers based on questions asked about an incident or a claim filed even if the company never paid a dime.

The measure carried by Sen. Mary McNally, a Billings Democrat, also is supported by Republican State Auditor and Insurance Commissioner Matt Rosendale. The bill would affect a broad range of insurance policies from homeowner’s and auto to commercial property and professional liability.

“Some homeowners have had their insurance canceled or not renewed for making inquiries about coverage for incidents that they, not the insurance company, ultimately pay for,” McNally said while introducing the bill to the Senate Business, Labor and Economic Affairs Committee. “It’s particularly ironic because most of these policies require you to make that notice. Then that information can be used against you.” Bob Biskupiak, the state’s deputy insurance commissioner and longtime agent, said the bill would provide “common sense” protections for consumers.

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