Folstad v. Farmers Insurance Exchange, 43740
| Decision Date | 17 August 1973 |
| Docket Number | No. 43740,43740 |
| Citation | 297 Minn. 496,210 N.W.2d 238 |
| Parties | Roxanne A. FOLSTAD, Individually and as Trustee for the Heirs of Arlene I. Folstad and Stacy Folstad, Decedents, Appellant, v. FARMERS INSURANCE EXCHANGE, Respondent. |
| Court | Minnesota Supreme Court |
Chestnut, Brooks & Burkard and Joseph T. Burkard, Minneapolis, for appellant.
Rider, Bennett, Egan, Johnson & Arundel and Chester D. Johnson, Minneapolis, for respondent.
Heard before KNUTSON, C.J., and PETERSON, TODD, and MacLAUGHLIN, JJ.
Minn.St.1967, § 72A.149, 1 since amended, 2 mandated uninsured motorist coverage in automobile liability insurance policies unless such coverage was rejected in writing. An exemption from this written-rejection requirement was provided for transactions involving the renewal of a policy where the coverage had previously been rejected by the insured. The issue in this case is whether the statutory requirement of written rejection applies in a situation where a policy, issued prior to the effective date of § 72A.149, is amended after the effective date so as to include an additional driver within the coverage of the policy.
On December 14, 1966, appellant's father (Folstad), who died March 30, 1972, entered into a contract of insurance with defendant Farmers Insurance Exchange (Farmers) under which policy Farmers provided automobile liability insurance for Folstad. No medical payments or uninsured motorist coverage was provided in the policy. Folstad had orally rejected uninsured motorist coverage in connection with the policy issued in 1966. Prior to January 1, 1968, a rejection of uninsured motorist coverage did not have to be in writing. The 1966 policy was renewed twice--June 14, 1967, and December 14, 1967.
In early January 1968, during the third renewal period and after the effective date of Minn.St.1967, § 72A.149 (which was January 1, 1968), Folstad applied to have his daughter added to the policy. On January 12, 1968, Farmers issued a declarations sheet containing a 'rate class change' and a premium increase of $6.97 to compensate for the additional driver. Although Farmers did not issue a new policy, an instruction on the lower righthand corner of the declarations sheet stated: 'ATTACH TO YOUR POLICY.' Folstad remained as the sole named insured on the policy itself.
Folstad was not informed of or afforded an opportunity to accept or reject uninsured motorist coverage in connection with the January 12, 1968, transaction. He neither requested nor rejected such coverage in January 1968.
On February 5, 1968, Folstad's wife and a minor daughter were killed in a collision with an uninsured automobile while occupying the insured vehicle. In an action for declaratory judgment brought by Roxanne Folstad, individually and as trustee for the heirs of the decedents, to establish coverage under the policy pursuant to Minn.St., § 72A.149, the district court ruled that the statutory requirement of written rejection was inapplicable to the January 12, 1968, transaction and that Folstad's oral rejection in 1966 was effective. Appellant's claim of coverage was accordingly denied. We disagree.
By the statute applicable on January 12, 1968, uninsured motorist coverage must have been rejected in writing unless the particular transaction involved only the renewal of a prior policy with respect to which the insured had already rejected such coverage. Since the January 12, 1968, transaction was more than a renewal and no written rejection occurred at that time, uninsured motorist coverage existed at the time of the accident. We are persuaded that to hold otherwise would frustrate the important policy considerations that prompted the legislature to restrict, and eventually abolish, the written-rejection exemption. If the addition of a driver to a policy does not involve more than a renewal, then the addition of a second car or the changing of the automobile covered by the policy could also arguably fall within the...
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