What one thinks should be covered by insurance and what is actually covered was recently highlighted when a Minnesota woman boating on Christmas lake in the “Land of 10,000 lakes” lost a portion of her leg when she was thrown from her family boat and run over by the propellor. Finding there was not coverage for her damages, she is now spearheading a bill in the Minnesota legislature to ban the “family exclusion” provision in watercraft liability policies sold in that state.
Like in the majority of watercraft liability policies marketed throughout the nation, Minnesota’s policies always excludes spouses and children from being able to collect medical or other monetary loss from a personal watercraft liability policy. This exclusion recognizes liability claims are based on accusations of negligence and allowing family members to accuse each other of negligence creates a situation where those involved could benefit from making false claims about injuries and damages. If such were to be allowed, the insurance company would not have a friend in the court and would make it difficult for an insurance company to determine negligence for a loss.
Paul Gazelka, Minnesota Senate majority leader addressing this issue states, “It’s a complicated issue, and I’m certainly willing to listen but I’m not sure it’s wise to have a policy where you can sue yourself. It will dramatically drive up the cost of liability insurance.”
“Changing the current system would allow for fraud and abuse,” said Mark Kulda, Vice President of Public Affairs for the Insurance Federation of Minnesota.
The crux of the problem lies in Godfrey’s statement for her interest in spearheading this bill, “I don’t want other people to go through a trauma like I’ve been through–and then learn the insurance they thought would cover them doesn’t.”
Like so many other issues with insurance, people think coverages are available but have never taken the time to really understand what is or isn’t included. Insurance policies are not designed to be a panacea for anything which may go wrong. If Godfrey would have taken some time before the fun and games of boating started and educated herself on the watercraft liability policy, she could have saved herself a lot of trauma of discovering her injuries wouldn’t be covered, or at least she would have known the risk she was putting herself in. She may also have reviewed her family health insurance plan which would have provided accident coverage for her.
It may sound harsh, but consumers do have an obligation to know what they are purchasing and if necessary be willing to spend the dollars required in order to get coverages desired.
Having said that, insurance agents need to recognize their duty, responsibility, and obligation to educate their clients as much as possible. Help them be actively involved in the buying process by pointing out as much as possible the limitations in the policies being discussed and pointing out options which may be available. Don’t sell based on premium only but by risks needing to be addressed. Better to point out limitations now than to deal with client feeling they were uninformed from the beginning.
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