Court reviews “stacking” provisions of uninsured motorist law

Almost all states have adopted laws to address uninsured motorists. Their primary purpose—to set a minimum amount of insurance or security drivers pay for the harm their negligence caused in an accident. One provision of an insurance, permitted in 28 states, including Pennsylvania, permits individuals who own more than one vehicle to multiply the uninsured motorist coverage by the number of cars insured under a single policy. Known as “stacking,” this option also allows insureds to add together multiple vehicles insured under different policies.

As an option that extends coverage outside of the typical policy, insureds who accept “stacking” provision pay a higher premium. Despite the consequent increase in costs, states such as Pennsylvania have upheld these provisions. Under the Motor Vehicle Financial Responsibility Law (MVFRA), a stacking provision applies to a policy as a default. Policyholders can waive this provision.

Policies must exist under the same insurer

A recent court case highlights the practical application of stacking as intended under the MVFRA. In 2018, a man had a collision with his motorcycle insured under a policy that did not include uninsured/underinsured (UM/UIM) coverage. He owned a car jointly with his wife and their daughter owned her own vehicle, both insured under single-vehicle policy’s through another insurer. Each of these policies barred UM/UIM coverage for injuries sustained while operating a household vehicle not listed on the policy.

The couple obtained benefits from the motorcycle collision, but then sought to recover UIM benefits from the second insurer under both policies. The trial court granted the insurer’s motion for a judgment on the factual similarity to a previous case. The couple contended a different case had precedent to an appellate court.

In ruling for the insurer, the Supreme Court analyzed all three cases against the provision of MVFRA. The case advanced by the couple involved two different policies by the same insurer. The denial of benefits there acted, in effect, to frustrate stacking in the absence of a waiver under MVFRA. Stacking did not apply to their case because they had policies with different insurers.

Experience matters

Compensation for a motor vehicle accident involves weighing the benefits and costs of UM/UIM insurance. Special considerations require an assessment of what to value and for how long. Attorneys who understand these options can offer guidance.