No Underinsured Motorist Coverage for Insured’s Collision with a Snowmobile

A Minnesota federal court recently held that an insured who collided with a snowmobile was not entitled to underinsured motorist benefits under the terms of the policy.  In United Financial Casualty Co. v. Nelson, No. CIV. 14-816 JRT/LIB (D. Minn. May 18, 2015), United insured, under a Commercial Auto Policy (“the Policy”), a semi-tractor and trailer owned by Bradley Nelson.  In 2011, Nelson’s semi-tractor collided with a snowmobile whose owner did not have auto insurance on the vehicle.  Nelson sought UIM benefits for injuries sustained in the accident.  United sought a declaration that a snowmobile is not an automobile as defined by the Policy and, as such, not an “underinsured auto” for purposes of coverage under the Policy.  Nelson argued the policy’s definition of “auto” was ambiguous, because a snowmobile are “designed for travel on public roads.”  United argued “designed” means “to plan or produce with special intentional adaptation to a specific end.”

U.S. District Court Judge Tunheim agreed.  Applying this definition, the court found that a snowmobile is not an “auto” under Nelson’s Policy, because it is not produced with special adaptation for travel on public roads.  The court also found the policy further excluded from “uninsured auto” as it was “designed mainly for use off public roads, while not on public roads.”  The court further explained that, even if the snowmobile qualified as “uninsured auto” under the policy’s definition, it was not under any circumstance an “auto” because it has crawler treads, not wheels.  As a result, Nelson was not entitled to UIM benefits.

This case is significant due to its clarification of the limitations of first-party coverage for non-auto accidents.  We will continue to monitor this and other decisions impacting insurance coverage and auto liability.  If you have any questions about this, or any other matter, please contact one of our attorneys.