Life insurance benefits battle: Did farmer die on a tractor or a ‘motor vehicle’?

July 10, 2012

By Troy Anderson, InsuranceQuotes.com

Murder, suicide and fraud are common exclusions in life insurance policies. But what if you die while driving a tractor on your farm?

In an unusual Minnesota lawsuit filed in May 2012, Annalee Balk alleges the National Rifle Association wrongfully refused to pay on a $150,000 accidental life insurance policy after her husband, John Balk, died in a tractor rollover accident on his farm on Sept. 28, 2010.

Motor vehicle or machine?

The NRA, which sold the policy to John Balk, refused to pay, claiming a policy rider said it didn't have to pay for a death that occurred "while operating a motor vehicle under the influence of alcohol," Minnesota attorney Todd Coryell, who's representing Annalee Balk, wrote in the lawsuit.

But the widow argues the John Deere tractor that her late husband was driving is not a motor vehicle under Minnesota law, and the NRA was wrong to reject the claim, Coryell wrote.

"My first blush on this case is that a farm tractor is never a motor vehicle," says Frank Darras, an insurance attorney in California. "It wasn't on the road or the highway. This tractor wasn't required to be licensed as a motor vehicle in Minnesota. It wasn't being used to transport passengers on a road or highway. It was a piece of farm equipment that at the time of the accident was being used to haul and compact dirt on the gentleman's farm."

Darras points out that Balk didn't live in a residential neighborhood and wasn't driving his tractor in a cul de sac. Balk lived on a farm in the small farming community of Belle Plaine, Minn.

"It also wasn't an accident where he crashed into a car or truck," Darras says. "He rolled over on some uneven and unstable ground, and the tractor allegedly flipped on top of him. Unfortunately, he couldn't jump or escape because he had bad knees. Tragically, he died under his tractor on his own farm."

Balk's attorney, Coryell, declines to comment. So does the NRA's attorney in this case, Michael Berger of Minneapolis.

In the lawsuit, Coryell wrote that the NRA's denial of the claim is wrong because the tractor is not defined as a motor vehicle under Minnesota law.

"The tractor was not being operated on a public road, was not required to be licensed by the state of Minnesota, and was simply used for standard farm work by the deceased," Coryell wrote.

Kevin Lynch, an assistant professor of insurance at The American College in Pennsylvania, says laws pertaining to life insurance policies tend to favor consumers. And whenever ambiguity arises over a life insurance policy, courts tend to rule in favor of the beneficiary, Lynch says.

Lynch says he expects the court will look at the policy, evaluate what the term "motor vehicle" means under state law and likely rule against the NRA.