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Why you should care about Auto Insurance “stacking” waivers

Pennsylvania UM/UIM Law

The Pennsylvania Supreme Court let stand a Superior court ruling that motorists are entitled to “stacked” uninsured/underinsured (UM/UIM) coverage when their insurance company fails to have the motorist sign stacking waivers for newly added cars.

This may be “Latin” to many but let me explain why you should be happy with this decision.

Stacking Defined

If you own and insure multiple cars, you can choose to “stack” your coverage or waive it. Stacking allows you to combine all of your policies to provide greater coverage. For example, if you own multiple cars and are paying for insurance on all of them, you can choose to “stack” your coverage and combine all of your different policies.

So, if you have $100,000 of UM/UIM Motorist coverage on a Toyota Camry and add a Ford F-150 to your policy with the same coverage, you can stack your coverages and get $200,000 of coverage. Sounds reasonable.

Of course, if you waive stacking, you are rejecting your ability to combine the policies but you get cheaper premiums.

Necessity of Waivers

But what happens if you originally waive stacking but then add new cars to the policy without declaring whether you are waiving stacking for the new cars?

In a case originally filed in Monroe County, motorist Ken Newhook bought an insurance policy with Erie Insurance in 2007, insuring three vehicles. When he took out the policy, he signed waivers rejecting stacking.

Over the course of the next six years, Newhook sold and added new cars to the policy. However, for two of the new cars, Erie never sent him stacking waivers for the added cars.

In 2013, he was seriously injured in an accident with an uninsured motorist. Since he could not collect from that motorist, he looked to his own uninsured motorist coverage to compensate him for his injuries. He had $100,000 of uninsured coverage on each of his four cars. Erie Insurance claimed he was entitled to only $100,000 in coverage.

Monroe County Court’s Ruling

Monroe County Judge David Williamson rejected Erie’s argument, holding that because the driver never signed stacking waivers for the new cars, he was entitled to total uninsured coverage of $400,000 because he owned four cars.

Superior Court Ruling

Erie appealed that decision to the Pennsylvania Superior Court which ruled on April 25, 2018 that “Erie was required to provide Newhook with a new stacking waiver form when he added two new vehicles to the policy….” Since it did not, Newhouse was entitled to stacked coverage of $400,000. This was true even though Newhouse was paying rates for non-stacked coverage.

Supreme Court Chooses Not to Review the Decision

On December 11, 2018, the Pennsylvania Supreme Court decided not to review the Superior Court decision. That means the opinion stands.

The opinion was labeled as “non-precedential” but because the Supreme Court chose not to review it, it’s a fairly persuasive view that the court views coverage decisions in favor of motorists. However, given its non-precedential nature, I anticipate that this ruling might still be considered for review at some point in the future.

If you would like to read the Superior Court’s opinion, it’s an interesting read. It is available from this link.

~Jerry Geiger
[email protected]

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