The Supreme Court of Pennsylvania, in a recent opinion, continued to reject the view that household vehicle exclusions are ipso facto unenforceable. In Erie Ins. Exch. v. Mione, 289 A.3d 524 (Pa. 2023), Albert Mione was injured after being hit by an underinsured vehicle while riding his motorcycle. That vehicle’s driver paid Mione the limits of the policy covering the subject vehicle, but Mione still sought payment through additional coverage. Mione’s motorcycle was insured through Progressive Insurance, but he previously waived underinsured coverage (“UIM”) under that policy prior to the accident in this case. However, Mione and his wife jointly owned a car insured by Erie Insurance. Their daughter lived with them and also owned a car insured by Erie. Both Erie policies included UIM coverage and so Mione sought to recover UIM benefits under those polices.
Despite Mione’s attempts, Erie denied the claims citing the fact that both policies contained household vehicle exclusions. These exclusions state that UIM coverage is not available under the applicable policy for injuries sustained while operating a household vehicle not listed on the policy under which benefits were sought. Erie denied coverage because Mione was riding his motorcycle at the time which was not listed on either Erie policy.
Erie filed a complaint in the Lehigh County Court of Common Pleas seeking a declaratory judgment that it did not have to pay the UIM benefits pursuant to this exclusion. The trial court granted Erie’s motion for judgment on the pleadings citing to Pennsylvania Supreme Court precedent with facts nearly identical to those presented in the instant case. In Eichelman v. Nationwide Insurance Co., 551 Pa. 558 (1998), a person was also injured while riding his motorcycle after being struck by an underinsured driver. The motorcyclist also sought UIM coverage under his parent’s policy as a resident relative since he waived UIM coverage in his motorcycle policy. The UIM carrier denied coverage based upon the household vehicle exclusion, which was ultimately upheld through a series of appeals.
Mione appealed the trial court’s ruling, but the Superior Court upheld the trial court’s ruling. This prompted further appeal to the Supreme Court of Pennsylvania. There, Mione argued that Gallagher v. GEICO Indemnity Co., 650 Pa. 600 (2019) overruled Eichelman. The court dissected both cases and ultimately disagreed with Mione and upheld the trial court’s original decision. Gallagher also involved a person being injured by an underinsured driver while riding a motorcycle. The motorcyclist had UIM coverage with GEICO which also insured two automobiles owned by the injured party with UIM coverage. GEICO paid the motorcyclist UIM coverage but denied additional UIM coverage based on the household vehicle exclusion. The court in Gallagher overruled GEICO’s denial holding that the denial was an attempt to skirt the Motor Vehicle Financial Responsibility Law’s (“MVFRL”) waiving of stacking requirements. Stacking of coverage is allowed unless the insurer specifically waives stacking. The motorcyclist in Gallagher did not waive stacking.
The Supreme Court distinguished Gallagher because Mione did not have UIM coverage on his motorcycle, which meant that the stacking and waiver issues in Gallagher was not relevant in the instant case. Therefore, Gallagher did not undermine Eichelman as applied to the subject facts. The Court upheld Eichelman and upheld the lower court’s ruling in favor of Erie that household vehicle exclusions are not ipso facto unenforceable. The Court’s opinion included a scenario where a person could waive more expensive UIM coverage for a motorcycle knowing the person would be covered by more affordable coverage under a house automobile policy. This would ultimately undermine the cost-containment rationale of the MVFRL.
