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Senate panel approves auto insurance bills that limit lawsuits, restrict treatment

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A Senate committee on Tuesday approved two bills aimed at reducing the cost of auto insurance in Minnesota.

One bill, sponsored by DFL Sen. Linda Scheid of Brooklyn Park, would make it harder for crash victims to sue in order to seek damages for things like pain, suffering and inconvenience.

The other bill, sponsored by Republican Sen. Paul Gazelka of Brainerd, would place restrictions on the treatment covered by auto insurance companies under a victim's personal injury protection policy. 

The Senate Committee on Commerce and Consumer Protection approved each bill on voice votes. Scheid's bill will head next to the Senate Judiciary Committee, and Gazelka's was sent to the Senate Finance Committee. 

Insurance companies backed both bills, saying they would help bring down the costs of auto insurance premiums and make the system more fair to insurance companies, who currently pay higher rates for medical care than other payers. 

Scheid's bill would make it so that victims could only seek pain and suffering damages in cases of death, disability of 60 days or more, permanent disfigurement or "serious permanent impairment of an important bodily function." Under current law, a crash victim can sue for pain and suffering anytime medical bills exceed $4,000.

The goal behind Gazelka's bill is to reduce costly claims insurance companies pay for minor injuries like muscle strains. He argued that the bill would make the system fairer to auto insurance companies by adopting payment and treatment standards similar to the state's worker's compensation system. 

Lawyers that represent accident victims testified against both bills. One had one of his clients, Dale Jensen of Prior Lake, speak to the committee about how he might not have been able to seek pain and suffering damages under Scheid's bill because his case wouldn't have met the threshold for filing a lawsuit. 

The personal injury lawyers said Gazelka's bill is too restrictive for accident victims and fails to acknowledge that some seemingly minor injuries can turn into major health issues requiring surgery later. 

Minnesota has higher premiums than surrounding states.