Just moved to Minnesota? Check your auto insurance

The Minnesota Court of Appeals delivered a strong piece of advice to newcomers with a decision today: Check your auto insurance.

In its decision, it ruled that a company that’s not licensed to write insurance here isn’t required to provide coverage to a policyholder who moved here from out of state.

The case involves James Yates, who had coverage from Founders Insurance Company as an Illinois resident when he moved here in 2013, when he collided with a car that had spun out of control on a highway ramp.

Yates hadn’t notified his insurance company of the move, so it denied his $17,000 medical claim under the state’s “no fault” law. An arbitrator, however, ruled that the company has to pay.

Today, however, the Minnesota Court of Appeals overruled the arbitrator (pdf).

Minnesota state law says that “every contract of liability insurance for injury, wherever issued, covering obligations arising from ownership, maintenance, or use of a motor vehicle . . . includes basic economic loss benefit coverages and residual liability coverages required by [the no-fault act], while the vehicle is in this state.”

Appeals Court judge Margaret Chutich, who has since been appointed to the Minnesota Supreme Court, acknowledged that at first glance, the law suggests that any motor-vehicle insurance policy issued anywhere by any insurer includes no-fault coverage while the insured vehicle is in Minnesota.

But Chutich declared that it only applies if the insurance company is authorized to write insurance in Minnesota. Founders isn’t.

She said the Legislature has had plenty of time to change the law since the court made a similar ruling in a case involving a 1980 car acccident.

In August 1980, Michelle Burgie was struck from behind by an Oldsmobile station wagon being driven by Nancy Wellbaum, an Ohio resident, employed by the United States Forest Service at a seasonal job in Isabella, Minnesota. Wellbaum carried only half the liability insurance required under Minnesota law.

The insurance company wouldn’t pay, insisting that it didn’t have to because it wasn’t authorized to write insurance in Minnesota.

Ironically, perhaps, the court ruled the insurance company must pay, insisting that two provisions in the no-fault insurance law have to be considered at the same time, in this case, the provision that stipulated the law applies to companies authorized to write insurance here.

The same law, then, that forced an insurance company to pay a damage claim in 1980, allowed an insurance company to skate on an economic-loss claim in 2016.