The appellate court in Founders Insurance Company v. Yates held that an insurer that is not licensed to write motor vehicle collision insurance policies, either for no-fault benefits or for liability coverage, in the state of Minnesota is not required to provide basic economic loss benefits (no-fault benefits).
Mr. James Yates moved from Illinois to Minnesota. His car was insured by a Founders Insurance Company policy. Mr. Yates’ vehicle was insured when he was in Illinois, but Mr. Yates did not inform Founders that he had moved to Minnesota. Founders Insurance writes dramshop liability insurance policies in Minnesota, but does not write either no-fault or liability insurance policies for motor vehicles in Minnesota.
Mr. Yates sustained injuries in a motor vehicle collision that took place in Minnesota. Mr. Yates incurred chiropractic bills for his injuries and applied to Founders Insurance for no-fault insurance benefits to cover those bills. Founders Insurance denied Mr. Yates’ claim. Mr. Yates then filed for no-fault arbitration and the arbitrator awarded Mr. Yates over $19,000 in chiropractic expenses, transportation costs, and interest. Founders then moved to vacate the award in district court and Mr. Yates moved to confirm the award.
The district court held that Founders was licensed to write insurance policies in the state of Minnesota and confirmed the award against Founders. Founders then appealed.
The issue on appeal was whether Minnesota Statutes section 65B.50 requires an out-of-state insurer that is not licensed to write motor vehicle collision no-fault and liability insurance policies in Minnesota, to provide basic economic loss benefits (or no-fault benefits) to its insured who was injured in a motor vehicle collision in Minnesota.
The appellate court noted that, contrary to the district court’s holding, the fact that Founders was licensed to write dramshop liability insurance policies in Minnesota did not necessarily mean it was licensed to write automobile no-fault and liability insurance policies as well. In fact, the appellate court found that Founders was, indeed, not licensed to write such automobile policies in Minnesota. Therefore, Minnesota Statutes section 65B.50 did not require Founders to provide no-fault insurance benefits to Mr. Yates, who was injured in a crash in Minnesota. The appellate court held that the arbitrator had exceeded his authority by awarding no-fault benefits to Mr. Yates and reversed the district court’s ruling.
The takeaway from this case is that an insurance company must be licensed to write no-fault and/or liability automobile insurance policies in the state of Minnesota to be compelled to provide no-fault benefits under Minnesota Statutes section 65B.50.