In Pennsylvania, under 75 Pa. C.S. § 1738, an insured with underinsured motorist benefits (“UIM”) can “stack” or multiply these benefits based on the number of vehicles covered by the insurance policy. This statutory system, which protects insured drivers involved in motor vehicle accidents with other drivers who have no insurance coverage or too little insurance coverage, has undergone several changes in recent years. Most recently, in early 2023, the Pennsylvania Supreme Court in Erie Ins. Exch. v. Mione, 289 A.3d 524 (Pa. 2023) clarified the applicability of “household vehicle” exclusions of UIM benefits to the stacking statute.
In Mione, Albert Mione owned a motorcycle insured by Progressive which, due to Mr. Mione’s express waiver, was not insured by UIM coverage. Mr. Mione and his wife Lisa Mione jointly owned a car that was insured by Erie, and their daughter Angela, who lived in their house, also had a policy with Erie, qualifying Albert and Lisa as insureds under both Erie policies. However, the Erie policies both contained “household vehicle” exclusions, which precluded the application of the Erie policies’ UIM coverage for any injuries sustained by an insured when the insured was operating a vehicle not identified as an insured vehicle under either Erie policies. In 2018, Mr. Mione sustained injuries in an automobile accident while operating his motorcycle.
Albert and Lisa submitted claims for UIM benefits to Erie, claiming the UIM coverage in the two Erie policies should be stacked thereby providing them with the total UIM benefits available under their own Erie policy plus the total UIM benefits available under Angela’s policy. Erie denied coverage, stating the “household vehicle” exclusions of both policies precluded such coverage. Erie filed suit with a declaratory judgment action asking the court to uphold its denial of Albert and Lisa’s claim for stacked UIM coverage. Both the Trial Court and the Appellate Court agreed with Erie, holding that the “household vehicle” exclusions were enforceable and unavailable for UIM stacking.
The Supreme Court would ultimately unanimously affirm the Superior Court’s decision. The Court determined that because the insureds waived UIM coverage for the motorcycle policy, they were not entitled to stack the UIM benefits from the Erie policies that contained the “household vehicle” exclusions. Very simply, without UIM coverage on the vehicle involved in the accident, there is nothing on which to “stack” the household vehicle policies. The Supreme Court distinguished this case from a prior case, Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019), which had similar facts, the only difference being that the vehicle involved in the accident was covered by UIM policy. In Gallagher, the Supreme Court ruled that barring an insured from stacking UIM policies that contained “household vehicle” exclusions when the underlying policy provided UIM coverage would serve as a de facto waiver of stacking and thereby violate § 1738 which requires an express waiver for stacking.
The Pennsylvania State legislature is in the process of repealing the entire UIM stacking statutory system. On September 7, 2023, a Pennsylvania State Senator introduced SB 901, which intends to repeal and rewrite the law that provides UIM stacking benefits. Touting the problems brought by confusion in the current stacking system, Senator Chris Gebhard intends the new bill will introduce a more straightforward approach to the purchasing of UIM coverage that establishes a set framework for the purchase of UM/UIM to avoid the complications in analyzing, purchasing, or renewing auto insurance policies. While there are still many steps in the legislative process to go before this bill becomes law, the status of Pennsylvania’s system of stacking UM/UIM coverages will be the focus of insureds, insurers, and Courts for the foreseeable future.
