The recent opinion of Oswald v. Southern Central Ins. Co., No. A18-0507, 2018 WL 6729771 (Minn. App. Dec. 24 2018) is a good reminder to attorneys and public adjusters alike to review a complete copy of the insurance policy and applicable laws when considering limitations issues applicable to a loss.

On June 21, 2016, the insureds hog barn burned down. At the time of the fire, the owners of the property were insured under a combination policy by North Star Mutual Insurance Company (North Star) and South Central Mutual Insurance Company (Central). Central provided coverage for basic perils, broad perils and limited perils, which included fire loss. North Star provided coverage for the perils of windstorm, hail, sinkhole collapse, volcanic action and other perils. North Star did not provide coverage for fire.

Central is a township mutual insurance company, operating under Minn. Stat. §67A.191. Township mutual insurance companies are collective or cooperative efforts of their membership to form a corporation for their mutual insurance against loss or damage from certain perils enumerated within Minn. Stat. §67A.13. A township mutual insurance company is unlike a commercial insurance company in a number of respects, one of which is that if the losses (one or more) exceed the company’s cash funds, the directors are required to levy an assessment on each policyholder for the proportionate amount to cover the excess loss.1

One of the most significant differences of a township mutual insurance company is that the legislature excepts such companies from “all provisions of the insurance laws of this state, not only in governmental relations with the state, but for every other purpose.”2 As such, a township mutual insurance company may issue a policy containing its own contractual limitations period.

In the Oswald matter, that is what Central did. Its policy contained a one-year limitation period, which applied to any fire loss coverage. The appellate court upheld the trial court’s dismissal of the insured’s action as it was not brought within one year of the date of loss, holding that the two-year suit limitation period contained in §65A.01, pertaining to standard fire insurance policies did not apply.

Bottom line: it is important to review all policy terms and conditions in their entirety, as well as specific state laws which may apply and impact the limitations provisions of when suit can be brought.
1 §67A.17.
2 §67A.25.