Auto Glass Victory in Minnesota Supreme Court

The Minnesota Supreme Court finally issued a decision in the case regarding anti-assignment clauses in auto insurance policies.  The case was argued before the court in January 2009.  They determined that anti-assignment clauses do not prevent policyholders from assigning to auto glass vendors the right to arbitrate disputes regarding auto glass claims.  You can view the decision at  

Four district court cases, involving four different auto glass shops and four different insurance companies were combined in this case. 

Insurance policies generally contain anti-assignment clauses; the clauses protect insurers from covering individuals and risks not covered by the policy.  Insurers sought to extend this protection to post-loss assignment of benefits.  Post-loss assignment is a longstanding practice in Minnesota and across the country.  In arguments before the court insurers were unable to identify even one state where post-loss assignment was prohibited. 

In addition to the four appellants, a number of auto glass companies united to support this action.  The ability to arbitrate disputes using the Minnesota no-fault arbitration mechanism was in question.  This decision removes questions about the standing of auto glass companies in arbitration, reaffirms that insurance proceeds “are subject to no-fault arbitration after assignment” and that policyholders themselves do not need to be party to any arbitration. 

At least one insurer has adopted policy language that specifically prohibits post-loss assignment of benefits in Minnesota.  This decision invalidates that language. 

The decision is a clear and decisive victory.

Minnesota Glass Association
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