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New Laws for 2020 Will Affect Insurance Claims Professionals in Multiple States

New personal injury laws 2020

Many new state laws are set to take effect in 2020, impacting the insurance industry and its claims professionals through changes to labor law codes, tort law, auto liability insurance coverage, and even flood zoning coverage.

Let’s review some of the most talked about state legislation from 2019, and take a look at how those new laws will affect individuals in the worlds of personal injury law and insurance claims adjusting in 2020.


California passed a significant amount of new legislation in 2019. Of that legislation, one of the new laws that garnered a great deal of media attention was Assembly Bill 5 (AB5). AB5 dramatically alters the standard for determining whether workers should be classified as employees or independent contractors (with the presumption now being that that the vast majority of workers are employees).

Under AB5, for a worker to be classified as an independent contractor, a hiring entity must first prove the following (under what is known as the “ABC Test”):

(A) The worker is free from the control and direction of the hirer in connection with the performance of the work, practically and in the contractual agreement between the parties.

(B) The worker performs work that is outside the usual course of the hiring entity’s business.

(C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity/company.

The ABC test amounts to a stricter and more straightforward standard of proof for companies to meet when categorizing employees. For most companies, meeting all of the above standards set forth in the ABC test will be challenging. Two of the largest corporations that are expected to be impacted by AB5 are Uber and Lyft.

Additionally, AB5 creates at least 50 exceptions for specific occupations and industries including: insurance brokers, physicians, architects, podiatrists, stock brokers, lawyers, accountants, engineers, veterinarians, direct sellers, real estate agents, hairstylists/barbers, aestheticians, commercial fishermen, and marketing professionals.

AB5 takes effect, for the purposes of workers’ compensation claims, beginning July 1, 2020.

Another California law making major headlines is State Bill 41 (SB41). Under the new SB41 law, which takes effect on January 1, reductions of damages for lost future earnings based on race, gender, or ethnicity in personal injury and wrongful death cases are prohibited. SB41 is the first law of its kind in the U.S., and is seen as a potential harbinger for future legislation that might sweep the country and disrupt the $429 billion tort law system.

Insurance companies have specifically cited such tort law expansion, which many insurance executives have referred to as a “tort tax,” as a major factor in their declining earnings. Earlier this year, in a conference call with shareholders, Travelers Insurance CEO, Alan Schnitzer, described “a tort environment that has deteriorated beyond our elevated expectation” when addressing financial losses for the quarter.

Ultimately, considering SB41 and the perspective on earnings from insurance company executives, we can likely expect to see an increase in premiums throughout 2020 (perhaps a significant increase if other states follow suit in enacting tort law that prohibits reductions in damages based on demographics).


In Colorado, House Bill 1283 (HB1283) takes effect on January 1. Upon receiving a written request from a claimant, HB1283 will require commercial and personal auto liability insurers to provide the following within 30 days:

  1. The name of each insured party
  2. The limits of liability coverage
  3. A copy of the relevant insurance policy

Any insurer that is found to have violated the disclosure requirement will be liable to the requesting claimant for damages in an amount of $100 per day.

With the passage of HB1283, attorneys have stressed that auto insurers should be aware of the increased need to obtain defense council early on to avoid unnecessary litigation.


Senate Bill 1 (SB1) rescinds a unique provision of Michigan insurance law that requires auto insurers to provide lifetime personal injury benefits to policyholders. The amended statutes will allow motorists to opt out of personal injury protection entirely, or opt for lower limits.

The new legislation came as an effort to reduce Michigan’s notoriously high auto insurance rates. Industry experts estimate that SB1 could have a dramatic impact on consumers, cutting Michigan’s rates by as much as half.

Additionally, in what can be considered more welcome news for the state’s drivers, the Michigan Catastrophic Claims Association (the group that reimburses insurers for excess personal injury claims) announced last month that it is reducing its assessment on policies from $220 to $100.


Oregon House Bill 2312 will require sellers to include property disclosure forms with all sales to indicate whether flood insurance may be required for homes located in designated floodplains.


House Bill 288 provides that guaranty associations are entitled to any collateral posted by an employer who purchased a large deductible through an insurance company. If an insurer is liquidated, the receiver will bill the insured party for the deductible amounts owed under the policy.

With the new laws of the new year, expect to see a rise in employment law claims, as well as headlines concerning how tort reform may evolve throughout the country following the passage of California’s SB41.

Tort and personal injury lawyers anticipate fairer settlements pertaining to the issue of lost wages, while insurance companies seem set on tearing down such legislation and fighting to ensure additional measures aren’t passed at the state or federal level.

More than likely, insurance rates will continue to rise in most states until a better sense of how the new laws will impact the industry is known.

PINews will continue to keep you updated as additional laws take effect.