Bill seeks to end family exclusion in boat, umbrella insurance

Courtney Godfrey lost her foot in a 2017 boating accident. With medical bills piling up, unable to return to work, and her home needing modifications to help with the new disability, Godfrey’s work insurance felt it should not cover the expenses from the accident. They reasoned it should be the responsibility of the boat owner’s insurance, her husband.

Pursuing the claim, she discovered neither her husband’s boat insurance nor his umbrella insurance policy would cover the bills. Owners and their family members related by blood or marriage are excluded from coverage.

Rep. Zack Stephenson

They were, in effect, “the victims of a marriage penalty,” Godfrey told the House Commerce Committee Tuesday. It was a scenario that she did not want to have happen to anyone else.

The committee approved and sent to the House Floor HF476 that would eliminate family exclusions in boat and personal umbrella insurance policies.

Bob Johnson, president of the Insurance of Federation of Minnesota, assured the committee the exclusion was legal and has been upheld by state courts, but if the exclusion was struck it’d certainly drive up policy rates. He said family medical coverage is offered already as an addition to boat and umbrella policies, making passage of a bill unnecessary.

Rep. Zack Stephenson (DFL-Coon Rapids), the bill sponsor, expressed opposition as five amendments were offered to change his bill.

Rep. Ron Kresha (R-Little Falls) unsuccessfully offered amendments that would have added language to prevent claims to more than one insurer, limited attorney fees to 20 percent of compensation awards, allowed cancellation of a policy as long as the conditions were enumerated within the policy contract and created an advisory group on property and casualty exclusions.

An amendment unsuccessfully offered by Rep. Chris Swedzinski (R-Ghent) would undo the bill’s intent by continuing to allow family exclusions.