Minnesota Statutes § 60A.08, subd. 12 (2002), does not require commercial automobile insurance policies to provide uninsured or underinsured motorist coverage for out-of-state rental vehicles.
Heard, considered, and decided by the court en banc.
The opinion of the court was delivered by: Gilbert, Justice.
This is a case of first impression involving a question of whether the Minnesota No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41-.71 (2002), requires commercial automobile policies to provide uninsured or underinsured motorist coverage ("UM/UIM") to occupants of an out-of-state rental vehicle. The court of appeals held that Minn. Stat. § 60A.08, subd. 12 (2002) requires commercial policies to provide only for damage and loss of use to rental vehicles pursuant to Minn. Stat. § 65B.49, subd. 5a (2002). Turner v. Mutual Serv. Cas. Ins. Co., 663 N.W.2d 36, 41 (Minn. App. 2003). We affirm.
In November 1999, Judd and Terese Turner traveled to New Orleans to attend a conference on behalf of Judd Turner's employer, Express Scripts. Express Scripts' corporate travel agency arranged the trip itinerary, air travel, hotel and a car rental from Budget Rent-A-Car. The company travel policy directed the Turners to decline additional insurance from Budget Rent-A-Car. Costs associated with the Turners' travel, including the car rental, were charged through a corporate credit card and later paid by Express Scripts.
On November 7, 1999, while driving towards Baton Rouge, the Turners were involved in a serious car accident with another car that was in the wrong lane. The head-on collision killed the driver and a passenger in the other car and injured the Turners. State Farm Insurance insured the other car, with policy limits of $25,000 per person and $50,000 per accident. State Farm Insurance settled the death claim of the estate of the other driver for $25,000, and the bodily injury claims of the Turners for all remaining liability coverage of $25,000. Costs associated with the Turners' injuries exceeded the State Farm Insurance payment. Mutual Service Casualty Insurance Company (MSI) insured the Turners with personal coverage and provided UM/UIM coverage with a limit of $250,000 per person and $500,000 per accident. Respondent Liberty Mutual Fire Insurance Company provided commercial coverage to Express Scripts that carried $1,000,000 in UM/UIM coverage.
Respondent's commercial policy provided coverage for an "insured," that was defined as anyone who uses, with the policyholder's permission, "a covered 'auto' you own, hire or borrow * * *." UM/UIM coverage was restricted to persons occupying a "covered auto," that was defined as "[o]nly those "autos" you own that because of the law in the state where they are licensed or principally garaged are required to have and cannot reject Uninsured Motorists Coverage." Under the policy terms, Express Scripts had only one commercial vehicle, a Dodge Caravan, that was subject to a long-term lease and that vehicle was used and garaged in Minnesota.
A declaratory judgment action was filed by the Turners to resolve a dispute regarding the UM/UIM coverage. Respondent denied that it should have provided UM/UIM coverage for this accident. MSI denied that it had primary UM/UIM coverage. The district court found that respondent's commercial insurance policy was required to provide UM/UIM coverage per Minn. Stat. § 60A.08, subd. 12. The district court then applied the $1,000,000 UM/UIM coverage that had been designated to Express Scripts' company vehicle. It designated respondent's coverage as primary, and the Turners' personal coverage as secondary.
The court of appeals reversed, holding that Minn. Stat. § 60A.08, subd. 12 requires commercial policies to provide only for damage and loss of use to rental vehicles pursuant to Minn. Stat. § 65B.49, subd. 5a. Turner, 663 N.W.2d at 41. The court noted that the Turners have access to UM/UIM coverage under their personal insurance policy. Id. at 42 n.1. We granted review on the statutory question.
The interpretation of a statute is a question of law that we review de novo. Hertz Corp. v. State Farm Mut. Ins. Co., 573 N.W.2d 686, 688 (Minn. 1998). The Minnesota No-Fault Automobile Insurance Act requires every motor vehicle owner to maintain a certain amount of UM/UIM coverage. Minn. Stat. § 65B.49, subd. 3a(2) (2002). The purpose of UM/UIM coverage is to protect named insureds from suffering an inadequately compensated injury caused by an accident with an inadequately insured automobile. Myers v. State Farm Mut. Auto. Ins. Co., 336 N.W.2d 288, 291 (Minn. 1983). In 1985, the legislature adopted several amendments to the No-Fault Act, including a new section governing UM/UIM coverage. Act of June 27, 1985, ch. 10, § 68, 1985 Minn. Laws, 1st Spec. Sess. 1781, 1840-41 (codified at Minn. Stat. § 65B.49, subd. 3(a)). One of the updated provisions provides:
The uninsured and underinsured motorist coverages required by this subsection do not apply to bodily injury of the insured while occupying a motor vehicle owned by the insured, unless ...