Today, the Minnesota Court of Appeals issued an opinion in Stoltenberg v. American National Property Casualty Company. In this case, Jessie Stoltenberg was passenger in a vehicle driven by her longtime boyfriend. The two were stuck by another driver. The at-fault driver did not have sufficient insurance coverage to fully compensate her for her injuries, so she brought an uninsured motorist claim against her boyfriend’s policy. Stoltenberg was a named insured under said insurance policy.
At the time Stoltenberg’s boyfriend obtained the policy in 1997, the policy provided underinsured motorist coverage in the amount of $250,000 to a person in Stoltenberg’s shoes. In 2005, the insurance company reduced coverage to a person in Stoltenberg’s shoes to $25,000, which is a decrease of $200,000 in coverage. To notify Stoltenberg’s boyfriend of the policy change, the insurance company buried said notice in a lengthy packet of information without clear and conspicuous notice of the reduction. When Stoltenberg brought her underinsured motorist claim, the insurance company insisted that only $25,000 was available to her.
Stoltenberg, represented Jennifer Olson of Schwebel, Goetz & Sieben, P.A., argued in district court that the insurance company substantially reduced coverage, which required the insurance company—under longstanding Minnesota law—to clearly and conspicuously notify the policyholder of the substantial reduction. Because it failed to do so, Stoltenberg was entitled to the full $250,000 in coverage. The district court agreed.
The insurance company appealed this decision. Attorney Charles Bird and Grant Borgen filed a brief in support of Stoltenberg’s position on behalf of the Minnesota Association for Justice. Attorneys Bird and Borgen argued—in part—that, because of the significant danger that reductions in coverage will slip past a busy insured when renewing an existing insurance policy, an insurance company that substantially reduces coverage must notify insureds with a loud horn and flashing lights about said policy reductions. This is because the typical consumer who has been satisfied with his or her coverages for years is interested in getting the premiums paid and moving onto other important matters. Consumers satisfied with their insurance coverage look at the bill itself, not the fine print that accompanies the bill. Minnesota law protects consumers and prevents insurance companies in such a circumstance from pulling a fast one on its insured.
The Minnesota Court of Appeals agreed with Olson, Bird, and Borgen. The court held that reducing coverage from $250,000 to $25,000 constituted a significant reduction in coverage. The court also concluded that burying the reduction in a lengthy packet of information is not sufficient notice. This means Stoltenberg is entitled to $250,000 in insurance coverage to compensate her for her injuries.
This is a big win for Stoltenberg and all consumers in Minnesota.