A bill introduced last week has created a great deal of conversation at the state capitol. It would require insurance coverage for all people on board a boat, regardless of family status, by removing the "Interfamily Tort Exclusion" under both watercraft insurance and umbrella policies.
Senate File 3610 and House File 4047 are authored by Senator Paul Anderson (Republican - Plymouth) and Representative Kelly Fenton (Republican - Woodbury). The bill was brought forth by Fox news reporter Courtney Godfrey who was injured in a boating accident last summer.
The 30-year-old Godfrey was thrown from a boat on Christmas Lake and her left foot was struck by the boat's propeller. He husband was driving the boat. She eventually lost her leg and now wears a prosthetic device. According to Godfrey, her recovery was made even more challenging when the family discovered she was excluded from their boat and umbrella insurance policies.
The young woman is leading the capitol charge for this legislation and her tale has become an ongoing story on local Fox news. Proponents point to the fact that Minnesota law currently requires insurance coverage for all family members in a car but not in a boat. There are more than 800,000 boats registered in the state.
The legislation is pretty straight forward. It would prohibit any exclusion or limitation on liability for damages for bodily injury solely because the injured person is a resident or member of the insured's household or is related by blood or marriage. Insurers would be allowed to exempt liability for damages resulting from fraud, intentional or criminal conduct or other exclusions permitted by law.
The proposal does recognize the potential impact this new law would have on policy premiums. It directs insurers to submit premium increases to the commerce commissioner. The commissioner must approve these filed rates if supported by actuarial and claims data.
The bill was introduced late in the session, just days before a major committee deadline and caught the industry a bit by surprise. Chances of this legislation passing in its current form are remote, but there will likely be hearings or more discussion on the issue. Please contact your state legislator and express your opinion or concerns on this legislation.
More importantly, the publicity surrounding this bill has raised questions from boat owners around the state. The MIIAB is working on information to assist you in responding to policyholders' questions.