Farm Bureau can use fine print to reduce coverage in death case to $20,000.00.
Abigail Fricke's Estate sued Farm Bureau after her husband negligently drove their car into a pond, causing her death. Farm Bureau had charged the family for $500,000.00 of liability coverage and the Estate attempted to collect it. In one of the exclusions in the fine print of Farm Bureau's policy, however, there was a provision that reduced the policy's liability limits to the state minimum ($20,000.00) in the event of a claim by a family member of the insured. In reliance on this "exclusion," Farm Bureau refused to pay more than $20,000.00 in liability for Abigail's death.
The trial court and Court of Appeals upheld Farm Bureau's decision. The judges explained that prior decisions of the Engler Majority on Michigan's Supreme Court supported Farm Bureau's "right" to reduce coverage to the statutory minimum, whether or not an insured knew that the limitation or reduction was in the policy. The judges also noted that prior decisions have held that such reductions in coverage are not a breach of public policy: courts have upheld similar provisions in an insurance policy, regardless of whether the exclusions or limitations are consistent with an insured's "reasonable expectation."