- 1015 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

Shelter Mutual Insurance Company, 

appellee, v. Larry Freudenburg, 

appellant.

___ N.W.2d ___

Filed February 7, 2020. No. S-19-265.

1. Summary Judgment: Appeal and Error. An appellate court affirms a 

lower court’s grant of summary judgment if the pleadings and admitted 

evidence show that there is no genuine issue as to any material facts or 

as to the ultimate inferences that may be drawn from the facts and that 

the moving party is entitled to judgment as a matter of law.

2. ____: ____. In reviewing a summary judgment, an appellate court views 

the evidence in the light most favorable to the party against whom the 

judgment was granted, and gives that party the benefit of all reasonable 

inferences deducible from the evidence.

3. Statutes: Appeal and Error. To the extent an appeal calls for statutory 

interpretation or presents questions of law, an appellate court must reach 

an independent conclusion irrespective of the determination made by the 

court below.

4. ____: ____. An appellate court will not resort to interpretation to 

ascertain the meaning of statutory words that are plain, direct, and 

unambiguous.

5. Statutes: Legislature: Intent. A collection of statutes pertaining to a 

single subject matter are in pari materia and should be conjunctively 

considered and construed to determine the intent of the Legislature, so 

that different provisions are consistent, harmonious, and sensible.

6. Statutes. It is impermissible to follow a literal reading that engenders 

absurd consequences where there is an alternative interpretation that 

reasonably effects a statute’s purpose.

7. ____. A court must attempt to give effect to all parts of a statute, and if 

it can be avoided, no word, clause, or sentence will be rejected as superfluous or meaningless.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

02/21/2020 12:06 AM CST
- 1016 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

Appeal from the District Court for Lancaster County: 

Jodi L. Nelson, Judge. Reversed and remanded for further 

proceedings.

George H. Moyer and Jack W. Lafleur, of Moyer & Moyer, 

for appellant.

Theresa D. Koller and Nathan D. Clark, of Cline, Williams, 

Wright, Johnson & Oldfather, L.L.P., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, 

and Freudenberg, JJ.

Freudenberg, J.

NATURE OF CASE

The primary issue in this case is whether Neb. Rev. Stat. 

§ 60-310 (Cum. Supp. 2018) allows provisions known as 

partial household exclusion clauses, which reduce automobile 

liability coverage from the policy amount to the state minimum 

when the injured person is an insured, relative, or resident 

of the insured’s household. The district court found that the 

statute unambiguously defined an automobile policy as coverage in the amounts set by the state minimums and that the 

second sentence of the statute prevented complete household 

exclusions, but did not prohibit partial exclusions. The district 

court granted summary judgment in favor of Shelter Mutual 

Insurance Company (Shelter) upholding the partial household 

exclusion clause, which reduced the insured’s coverage from 

the policy amount of $100,000 to $25,000.

BACKGROUND

The insured, Larry Freudenburg, appeals from an order 

granting summary judgment in favor of Shelter in its action for 

declaratory judgment regarding the application of § 60-310 to the 

underlying automobile liability policy and against Freudenburg 

on his counterclaim for breach of contract. Freudenburg did not 

file a cross-motion for summary judgment. Shelter originally 
- 1017 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

brought the action against both Freudenburg and Bruce R. 

Ramage, the director of the Nebraska Department of Insurance, 

in his official capacity. Ramage was later dismissed from the 

case and is not part of this appeal.

The facts are undisputed. On October 20, 2016, Freudenburg 

was traveling as a passenger in a car covered by a policy Freudenburg and his wife had purchased from Shelter. 

Freudenburg made a claim for his injuries under the Shelter 

policy because the injuries were not covered by any other 

policies. After the accident, Freudenburg filed a claim for 

reimbursement of expenses based on his injuries totaling over 

$100,000. Rather than paying the policy limit for bodily injury 

in the amount of $100,000, Shelter paid $25,000, which is the 

minimum level of automobile liability coverage that drivers in 

Nebraska are required by law to carry.

Shelter refused to pay Freudenburg’s request for an additional $75,000 based on a partial household exclusion clause in 

Freudenburg’s policy. A section titled “Partial Exclusions From 

Coverage A and Coverage B” begins with the following:

Coverage A [for bodily injury] and Coverage B [for 

property damage] do not cover any of the types of damages listed below unless no other policy of liability insurance provides coverage for those damages in the amount 

required by the applicable financial responsibility law. 

In that event, the minimum dollar amount of coverage 

required by the applicable financial responsibility law

will be provided by this policy. No additional benefits 

that are not required by that law will be provided.

Subsection 13 of this provision allows for a reduction in bodily 

injury coverage for “[d]amages owed to any insured, relative, or resident of an insured’s household.” Shelter asserted 

that the $100,000 policy for bodily injury was reduced to the 

Nebraska minimum of $25,000 pursuant to the partial household exclusion clause.

Shelter received a letter from Ramage on behalf of the 

Nebraska Department of Insurance which asked Shelter why it 
- 1018 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

had not paid the full $100,000 of the policy. Shelter’s response 

cited the partial household exclusion clause and asserted that 

such an exclusion was not prohibited by Nebraska law, specifically that it did not fall under the prohibition found in 

§ 60-310. The Nebraska Department of Insurance sent a letter 

indicating it disagreed with Shelter’s interpretation of § 60-310, 

which provides:

Automobile liability policy means liability insurance 

written by an insurance carrier duly authorized to do business in this state protecting other persons from damages 

for liability on account of accidents occurring subsequent 

to the effective date of the insurance arising out of the 

ownership of a motor vehicle (1) in the amount of twentyfive thousand dollars because of bodily injury to or death 

of one person in any one accident, (2) subject to the limit 

for one person, in the amount of fifty thousand dollars 

because of bodily injury to or death of two or more persons in any one accident, and (3) in the amount of twentyfive thousand dollars because of injury to or destruction 

of property of other persons in any one accident. An automobile liability policy shall not exclude, limit, reduce, or 

otherwise alter liability coverage under the policy solely 

because the injured person making a claim is the named 

insured in the policy or residing in the household with the 

named insured.

In June 2017, Shelter brought a declaratory action seeking to 

declare that partial household exclusions are permissible under 

Nebraska law. The district court determined that § 60-310 

unambiguously forbade only reductions or alterations in coverage that result in the coverage for the insured, relative, or 

household member’s falling below the mandatory minimums 

described in the first sentence of the statute. The court declined 

to consider the legislative history concerning the 2013 change 

to § 60-310, which added the language “limit, reduce, or otherwise alter” to the prior version of the statute and explicitly 

discussed the Legislature’s intent to thereby prohibit partial 
- 1019 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

household exclusions. The court concluded that partial household exclusions are not prohibited by § 60-310. The court 

granted summary judgment to Shelter. Freudenburg appeals.

ASSIGNMENTS OF ERROR

Freudenburg assigns that summary judgment was improper 

because the trial court erred in (1) interpreting the last sentence 

of § 60-310 to allow for reductions in coverage down to the 

state minimum; (2) refusing to consider the legislative history 

of 2013 Neb. Laws, L.B. 316; and (3) enforcing the partial 

household exclusion contained in the policy Freudenburg purchased from Shelter.

STANDARD OF REVIEW

[1] An appellate court affirms a lower court’s grant of summary judgment if the pleadings and admitted evidence show 

that there is no genuine issue as to any material facts or as 

to the ultimate inferences that may be drawn from the facts 

and that the moving party is entitled to judgment as a matter 

of law.1

[2] In reviewing a summary judgment, an appellate court 

views the evidence in the light most favorable to the party 

against whom the judgment was granted, and gives that party 

the benefit of all reasonable inferences deducible from the 

evidence.2

[3] To the extent an appeal calls for statutory interpretation 

or presents questions of law, an appellate court must reach an 

independent conclusion irrespective of the determination made 

by the court below.3

ANALYSIS

Although Freudenburg has assigned several errors on appeal, 

the errors are rooted in a single question of how to interpret 

1 Williamson v. Bellevue Med. Ctr., ante p. 312, 934 N.W.2d 186 (2019).

2 Id.

3 In re Adoption of Micah H., 301 Neb. 437, 918 N.W.2d 834 (2018).
- 1020 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

§ 60-310. Shelter believes the only question in this regard is 

how to understand § 60-310’s term “automobile liability policy” in the context of the statute’s prohibition that “[a]n automobile liability policy shall not exclude, limit, reduce, or otherwise alter liability coverage under the policy solely because 

the injured person making a claim is the named insured in the 

policy or residing in the household with the named insured” 

(hereinafter the household exclusion prohibition). We also 

find the statute’s term “liability coverage” to be essential to 

our analysis.

[4-7] An appellate court will not resort to interpretation 

to ascertain the meaning of statutory words that are plain, 

direct, and unambiguous.4 A collection of statutes pertaining 

to a single subject matter are in pari materia and should be 

conjunctively considered and construed to determine the intent 

of the Legislature, so that different provisions are consistent, 

harmonious, and sensible.5 It is impermissible to follow a literal reading that engenders absurd consequences where there is 

an alternative interpretation that reasonably effects a statute’s 

purpose.6 A court must attempt to give effect to all parts of a 

statute, and if it can be avoided, no word, clause, or sentence 

will be rejected as superfluous or meaningless.7

The Motor Vehicle Registration Act8 generally provides the 

rules and regulations for acquiring and maintaining registration 

of vehicles that are operating on Nebraska roadways. The first 

sentence of § 60-310 expressly defines “automobile liability 

policy” to be coverage in certain amounts based on state minimums for each category, stating:

Automobile liability policy means liability insurance 

written by an insurance carrier duly authorized to do 

4 State v. Montoya, ante p. 96, 933 N.W.2d 558 (2019).

5 State v. Paulsen, ante p. 21, 932 N.W.2d 849 (2019).

6 State v. McColery, 301 Neb. 516, 919 N.W.2d 153 (2018).

7 Id.

8 See Neb. Rev. Stat. §§ 60-301 to 60-3,231 (Reissue 2010 & Cum. Supp. 

2016).
- 1021 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

business in this state protecting other persons from damages for liability on account of accidents occurring subsequent to the effective date of the insurance arising out 

of the ownership of a motor vehicle (1) in the amount 

of twenty-five thousand dollars because of bodily injury 

to or death of one person in any one accident, (2) subject to the limit for one person, in the amount of fifty 

thousand dollars because of bodily injury to or death of 

two or more persons in any one accident, and (3) in the 

amount of twenty-five thousand dollars because of injury 

to or destruction of property of other persons in any 

one accident.

The coverage so described is commonly referred to as “25/50/25 

coverage.” Other statutes of the Motor Vehicle Registration Act 

then set forth that a driver must show proof of financial responsibility9

 or a current “automobile liability policy”10 in order to 

register a vehicle and must have a current “automobile liability 

policy”11 anytime the vehicle is operated in Nebraska.

The second, and last, sentence of § 60-310 addresses the 

legality of policy provisions that seek to exclude or alter coverage based on the injured claimant in the accident’s being the 

named insured or a member of the named insured’s household. This is in contrast to a friend or acquaintance who is 

injured as the driver or passenger of the insured’s vehicle, 

who would be covered up to the general coverage limits of the 

insured’s policy.

The two sentences of § 60-310 both use the term “automobile liability policy,” and we logically must read both sentences 

as using the same meaning for that term. Further, under a plain 

reading of the second sentence of § 60-310, we understand 

“under the policy” as referring to that same “automobile liability policy.”

9 See § 60-346.

10 See § 60-387.

11 See § 60-390.
- 1022 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

Shelter observes that the definition of “automobile liability 

policy” in the first sentence of § 60-310 has no modifier and 

simply describes coverage “in the amount of” 25/50/25 coverage. Shelter proposes that the plain language of § 60-310 

thus requires that we read “automobile liability policy” as a 

policy providing coverage “only” or “exactly” in the amount 

of 25/50/25. Freudenburg, in contrast, asserts that “automobile 

liability policy” should be read as a policy providing “at least” 

25/50/25 coverage. We agree with Freudenburg.

Shelter’s proposed definition of “automobile liability policy,” i.e., “25/50/25 . . . liability insurance”12 (nothing more and 

nothing less), engenders absurd consequences when applied to 

the second sentence of § 60-310, as well as elsewhere under 

the act. If, under the second sentence of § 60-310, a policy with 

coverage greater than the 25/50/25 minimum is not an “automobile liability policy,” then the household exclusion prohibition of the second sentence would not apply to such policies 

at all. Under Shelter’s proposed construction, the household 

exclusion prohibition of § 60-310 would read as follows: 

“[A 25/50/25] automobile liability policy shall not exclude, 

limit, reduce, or otherwise alter liability coverage under the 

[25/50/25] policy solely because the injured person making a 

claim is the named insured in the [25/50/25] policy or residing in the household with the named insured.” Such a reading 

would mean that the household exclusion prohibition of the 

second sentence of § 60-310 would not even be applicable to 

Freudenburg’s policy under Shelter’s interpretation of “automobile liability policy,” because his policy was for coverage 

referred to as “100/300/100.” Under Shelter’s proposed definition of “automobile liability policy,” Shelter would have been 

free under Nebraska law to completely exclude Freudenburg 

from coverage.

Furthermore, such a reading would lead to the absurd result 

that the Motor Vehicle Registration Act does not regulate 

12 Brief for appellee at 13.
- 1023 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

all automobile insurance purchased by Nebraska residents, 

but only insurance for coverage in the minimum amount of 

25/50/25.13 This appears contrary to the overall intent of the 

statutory scheme, as usage of the term “automobile liability 

policy” elsewhere seems to include policies with coverage 

in excess of the 25/50/25 minimums set forth in § 60-310.14

For example, reading the definition of “automobile liability 

policy” to include policies that exceed the state minimums is 

in harmony with the language of § 60-390, which provides 

in part:

On the back of the certificate, the certificate of registration shall include a statement in boldface print that an 

automobile liability policy or proof of financial responsibility is required in Nebraska. By paying the required 

registration fees, every person whose name appears on 

the registration of the motor vehicle or trailer certifies 

that a current and effective automobile liability policy or 

proof of financial responsibility will be maintained for 

the motor vehicle or trailer at the time of registration and 

while the motor vehicle or trailer is operated on a highway of this state and that he or she will also provide a 

current and effective automobile liability policy, evidence 

of insurance, or proof of financial responsibility for the 

motor vehicle or trailer upon demand.

Under Shelter’s interpretation of “automobile liability policy,” 

anyone carrying proof of a policy in amounts that are not 

exactly 25/50/25 is not carrying proof of an effective automobile liability policy.

Thus, “automobile liability policy” must mean a policy with 

coverage in at least the 25/50/25 amount and not a policy with 

overall limits of “only” or “exactly” the minimum 25/50/25 

coverage amount. Understanding “automobile liability policy” 

to mean coverage in the amount of at least 25/50/25 is in 

13 See §§ 60-301 to 60-3,231.

14 See §§ 60-323, 60-387, 60-390, 60-3,167, and 60-3,168.
- 1024 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

harmony with the term’s usage throughout the Motor Vehicle 

Registration Act.15 Moreover, this understanding avoids two 

absurd results: First, it avoids a situation where the Motor 

Vehicle Registration Act only regulates policies with coverage limits of 25/50/25. Second, it avoids the situation where a 

policy that includes coverage limits above 25/50/25 does not 

qualify as proof of an automobile liability policy elsewhere in 

the act.16

Perhaps realizing that it would be nonsensical to read the 

household exclusion prohibition as applying to only 25/50/25 

policies, Shelter does not acknowledge the logical consequences of its plain language argument that “automobile liability policy” means a policy providing “only” or “exactly” 

25/50/25 coverage. Shelter instead asserts that a consistent 

application of its understanding of “automobile liability policy” 

results merely in prohibiting exclusions for a claimant insured 

or household member, in policies with underlying maximum 

coverage in any amount, which result in lowering coverage 

for such claimants below the 25/50/25 minimum required of 

drivers under Nebraska law. By conceding the applicability 

of the household exclusion prohibition to policies providing 

coverage above the 25/50/25 minimum, such a proposed reading of the statute actually utilizes Freudenburg’s understanding 

of “automobile liability policy” as a policy providing coverage 

in at least the 25/50/25 amount, not Shelter’s understanding of 

“automobile liability policy” as a policy with coverage in only 

the 25/50/25 amount.

What Shelter’s argument really is about is the term “liability 

coverage.” In essence, Shelter’s reading proposes the insertion of the modifier “the minimum 25/50/25” into the phrase 

“liability coverage” in the last sentence of § 60-310. In other 

words, Shelter wants to make the term “liability coverage” synonymous with the definition of “automobile liability policy.”

15 See State v. Paulsen, supra note 5.

16 See § 60-387.
- 1025 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

The Motor Vehicle Registration Act does not define “liability coverage.” But while not controlling, the term “liability 

coverage” is used elsewhere in the statutes governing insurance 

to refer collectively to the various categories of insurance that 

cover liability arising out of automobile accidents.17 We give 

the term the same plain meaning in § 60-310.

As such, the term “liability coverage” refers more broadly 

to the various types of liability coverage afforded in an automobile liability policy. From its plain meaning, it follows that 

where, as we have already determined, “automobile liability policy” includes all policies with coverage of at least 

25/50/25, the second sentence of § 60-310 clearly prohibits any 

“exclu[sions], limit[ations], reduc[tions], or . . . alter[ations]” 

to the policy’s liability coverage “solely because the injured 

person making a claim is the named insured in the policy or 

residing in the household with the named insured.”

We hold that § 60-310 applies to policies both with coverage limits at the minimum required by law and with coverage 

limits above the minimum required by law and that it prohibits both exclusions that seek to completely exclude liability 

coverage for an injured insured or household member and 

exclusions that seek to limit, reduce, or alter the liability coverage to the minimum required by law for an injured insured 

or household member. Simply put, an automobile liability 

policy in any coverage amount is not permitted to exclude or 

reduce liability coverage under the policy solely on the ground 

the claimant is a named insured or resident in the named 

insured’s household.

Because the plain language of § 60-310, viewed with the 

other sections of the Motor Vehicle Registration Act, permits 

only one reasonable interpretation, we do not consider the 

legislative history. However, for the sake of completeness, 

we note that in 2013, the Legislature amended the household 

exclusion prohibition to its current form. The bill proposing 

17 See, e.g., Neb. Rev. Stat. §§ 44-514 and 60-1407.01(3) (Reissue 2010).
- 1026 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

the 2013 amendment was introduced with the specific intent 

to render invalid both partial household exclusions and total 

household exclusions. The record of the committee hearings 

for 2013 Neb. Laws, L.B. 316, demonstrates the bill’s sponsor and the committee understood that the language originally 

added in 1995 resulted in preventing only total household 

exclusions, which was not what the Legislature had wished 

to achieve.

The intent of the 2013 amendment was to prohibit all household exclusions, both total and partial.18 The bill’s sponsor, 

Senator Burke Harr, explained it this way:

For example, a person might have a policy providing 

$500,000 in coverage, which we discussed earlier, but the 

insurer includes a provision that says if the insured person 

. . . the injured person . . . is related to or residing with the 

named insured, the coverage is only $25,000. This thwarts 

the intent of the Legislature. I believe (LB)316 maintains 

the intent of the Legislature in repealing the guest statute 

and prohibiting household exclusions.19

Harr provided the same explanation to the entire Legislature 

during the floor debates.20 The Legislature passed the law on a 

vote of 44 to 0.21

CONCLUSION

We conclude that the district court erred in granting summary judgment to Shelter on its declaratory judgment action, 

and therefore, we must reverse that decision and remand this 

matter for further proceedings consistent with this opinion. 

For the foregoing reasons, the judgment of the district court 

18 See Introducer’s Statement of Intent, L.B. 316, Committee on Banking, 

Commerce and Insurance, 103d Leg., 1st Sess. (Feb. 11, 2013).

19 Committee on Banking, Commerce and Insurance Hearing, L.B. 316, 103d 

Leg., 1st Sess. (Feb. 11, 2013).

20 Floor Debate, L.B. 316, 103d Leg., 1st Sess. (Mar. 01, 2013).

21 Floor Debate, L.B. 316, 103d Leg., 1st Sess. (Mar. 28, 2013).
- 1027 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

is reversed and the cause is remanded for further proceedings 

consistent with this opinion.

Reversed and remanded for 

further proceedings.

Papik, J., not participating.

Stacy, J., concurring.

I agree with the majority’s resolution of this case, which 

presents a very narrow question of statutory construction. We 

are asked to determine whether a 2013 amendment to Neb. 

Rev. Stat. § 60‐310 (Reissue 2010) should be understood to 

prohibit, or instead to authorize, a clause in an automobile 

liability policy that reduces liability coverage down to the 

statutory minimum when the claimant is a named insured or 

resides in the named insured’s household. The parties refer to 

such a provision as a “partial household exclusion.” I write 

separately to provide a brief overview of the historical treatment of household exclusions under Nebraska law.

In a series of opinions beginning with Allstate Ins. Co. v. 

Farmers Mut. Ins. Co.,

1

 decided in 1989, this court held that 

household exclusions in automobile liability insurance policies 

were valid and enforceable under Nebraska law and not contrary to public policy.2

 In these cases, we reasoned generally 

that household exclusions, when contained in an automobile 

liability policy not being used as proof of future financial 

responsibility, did not violate public policy because the statutes 

prescribing the general requirements for automobile liability 

1 Allstate Ins. Co. v. Farmers Mut. Ins. Co., 233 Neb. 248, 444 N.W.2d 676 

(1989).

2 See id. (holding household exclusion in automobile liability policy is 

not invalid as against public policy); State Farm Mut. Auto. Ins. Co. v. 

Hildebrand, 243 Neb. 743, 502 N.W.2d 469 (1993) (holding household 

exclusion in automobile liability policy not used as proof of financial 

responsibility under Motor Vehicle Safety Responsibility Act does not 

violate public policy and is enforceable); and Allied Mut. Ins. Co. v. State 

Farm Mut. Auto. Ins. Co., 243 Neb. 779, 502 N.W.2d 484 (1993) (same).
- 1028 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

policies in Nebraska did not contain language prohibiting such 

exclusions.3

In 1995, the Legislature changed that by adding the following language to Neb. Rev. Stat. § 60‐301(3) (Supp. 1995): “An 

automobile liability policy shall not exclude liability coverage 

under the policy solely because the injured person making a 

claim is the named insured in the policy or a spouse or relative 

residing in the same household with the named insured.”4 The 

practical effect of this new statutory language was to establish, as a matter of public policy in Nebraska, that household 

exclusions were no longer valid and enforceable in automobile 

liability policies.

In 2005, the Legislature recodified the Motor Vehicle 

Registration Act and, as relevant here, repealed § 60‐301 and 

enacted § 60‐310.5 After the 2005 amendments, § 60‐310 prohibited provisions in automobile liability policies that “exclude 

liability coverage under the policy solely because the injured 

person making a claim is the named insured in the policy or 

residing in the household with the named insured.”6 Thereafter, 

in 2013, the Legislature amended that portion of the statute 

which prohibits household exclusions, so that § 60‐310 (Cum. 

Supp. 2018) currently provides: “An automobile liability policy shall not exclude, limit, reduce, or otherwise alter liability 

coverage under the policy solely because the injured person 

making a claim is the named insured in the policy or residing 

in the household with the named insured.”

Shelter argues that its partial household exclusion does 

not run afoul of the current language in § 60‐310 because it 

neither completely excludes liability coverage nor reduces 

liability coverage below the statutory minimum required under 

Nebraska law.

3 See id.

4 See 1995 Neb. Laws, L.B. 37.

5 2005 Neb. Laws, L.B. 274.

6 See id.
- 1029 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

In that regard, it is worth noting that some other courts 

have construed their statutory scheme to allow partial or limited household exclusions in automobile liability policies, so 

long as liability coverage is afforded up to the minimum 

limits required by the state’s financial responsibility statute.7

 However, I agree with the majority’s conclusion that the 

plain language in § 60‐310 simply is not amenable to such a 

construction.

Section 60‐310 uses language that is plain and unambiguous to prohibit automobile liability policies from excluding, 

limiting, reducing, or otherwise altering liability coverage 

solely because the claimant is the named insured or residing 

in the named insured’s household. This statutory language, 

both on its face and in light of its historical evolution, leaves 

no room for a successful argument that by amending § 60‐310 

in 2013, the Legislature intended to actually allow household exclusions in automobile liability policies so long as 

they did not reduce liability coverage below the minimum 

required limits.

It is the function of the Legislature through the enactment 

of statutes to declare what is the law and public policy of 

this state.8 While there may be sound public policy reasons to 

limit insurance coverage based on whether one resides in the 

7 See, e.g., Shook v. State Farm Mut. Ins. of Bloomington, Ill., 872 F. 

Supp. 768 (D. Mont. 1994) (household exclusion that limited coverage to 

statutory minimums did not violate public policy inherent in Montana’s 

mandatory insurance law); Stearman v. State Farm, 381 Md. 436, 849 A.2d 

539 (2004) (household exclusion reducing limit of liability coverage to 

statutory minimum amount valid when policy otherwise provided liability 

coverage in excess of statutory minimum liability limits); Hoque v. Empire 

Fire and Marine Ins. Co., 281 Ga. App. 810, 637 S.E.2d 465 (2006) (when 

policy provides liability coverage above statutorily minimum, household 

exclusion does not violate public policy so long as recovery is permitted 

in amount of compulsory minimum insurance).

8 Alsidez v. American Family Mut. Ins. Co., 282 Neb. 890, 807 N.W.2d 184 

(2011).
- 1030 -

Nebraska Supreme Court Advance Sheets

304 Nebraska Reports

SHELTER MUT. INS. CO. v. FREUDENBURG

Cite as 304 Neb. 1015

named insured’s household,9 that is a decision properly left to 

the Legislature, not the courts. Because I agree with the majority that the language of § 60‐310 is plain and unambiguous in 

prohibiting provisions in an automobile liability policy that 

exclude, limit, reduce, or alter liability coverage solely because 

the claimant is the named insured or resides in the named 

insured’s household, I concur in the result reached here.

9 See, e.g., id. (holding exclusions in uninsured and underinsured motorist 

coverage for vehicles owned or regularly used by named insured or any 

resident of their household do not violate public policy as expressed by 

Legislature because exclusions mirror statutory provisions). See, also, 

Neb. Rev. Stat. § 44‐6407(2) (Reissue 2010) (defining uninsured or 

underinsured motor vehicle to exclude vehicles “[o]wned by, furnished, or 

available for the regular use of the named insured or any resident of the 

insured’s household”).