House votes to eliminate family exclusions in certain insurance policies

In 2017, Courtney Godfrey lost her foot in a boating accident. Unable to return to work, medical bills mounting, and her home needing modifications to help with the new disability, Godfrey was relying on insurance coverage for help. But that the help never came. The insurer would not cover the accident, claiming it should be the responsibility of the boat owner’s insurance, her husband.

Yet neither her husband’s boat insurance nor his umbrella insurance policy would cover the bills, Godfrey told a House committee earlier this month. A liability provision that she characterized as “a marriage penalty” excluded owners and their family members related by blood or marriage from coverage.

Godfrey’s desire to stop this scenario from happening to other Minnesotans helped create HF476, which the House passed 70-54 Thursday.

Sponsored by Rep. Zack Stephenson (DFL-Coon Rapids), the bill eliminates family exclusions in boat and personal umbrella insurance policies. It now heads to the Senate where Sen. Carrie Ruud (R-Breezy Point) is the sponsor.

A change in insurance rates was unlikely given how few accidents occur, and at worst an increase would be slight, according to Stephenson.

“I would gladly play the marginal cost of ensuring my 6- and 4-year-old daughter are protected when we go out on the boat this summer,” Stephenson said.

Opponents have argued the exclusion has been upheld by state courts and that striking it would result in higher prices for insurance coverage. They have also pointed to family medical coverage options that are available for purchase with boat and umbrella policies, saying a solution already exists that makes removing the liability provision unnecessary.

“If this bill goes through premiums are going to go up,” Rep. Tony Jurgens (R-Cottage Grove) said.

With only 40 to 50 percent of boats insured in Minnesota, he asked, “Do you think more boats are going to be insured or fewer boats are going to be insured? I think fewer.”