In Erie Insurance Exchange v. King, the Superior Court recently applied a household exclusion in the policy, despite the Supreme Court’s prior ruling in Gallagher v. GEICO that household exclusions should be eliminated or limited to their facts.
In King, Erie filed a Motion for Judgment on the Pleadings after filing a declaratory judgment action in the Monroe County Court of Common Pleas. Erie asserted that Plaintiffs had rejected stacking and there was a household exclusion in the Erie policy issued to them. The underlying facts are as follows: Plaintiff Jay King was operating a Peterbilt truck in which Plaintiff Cora Labar was a passenger. They were struck by an uninsured drunk driver. The truck was insured by a commercial policy issued by Sentry Select and issued to “Night Train Express, Inc.” King had a separate policy issued by Erie to him and his girlfriend.
Both Plaintiffs made claims for uninsured motorist benefits under the Sentry Select policy and received benefits. Both Plaintiffs subsequently made claims for uninsured motorist benefits under the Erie personal policy. Erie denied coverage based upon the fact that a stacking rejection waiver form had been executed and that there was a household exclusion in the policy. Erie filed a declaratory judgment action and filed a Motion for Judgment on the Pleadings which was granted.
Plaintiffs appealed, arguing that the trial court failed to follow the Pennsylvania Supreme Court Court’s holding in Generette v. Donegal Mut. Ins. Co., 957 A.2d 1180, (2008), in finding that appellants could not stack uninsured motorist benefits between the commercial policy covering them as guest passengers, and the personal policy covering them as “insureds.” They also raised the issue that the trial court erred in concluding the household exclusion was applicable.
In King, the Superior Court determined that stacking was inapplicable, such as under Generette, as the Sentry Select policy in which the Plaintiffs were guest passengers formed a first layer of UM coverage, and the Erie personal policy formed the second layer of UM coverage.
The Court further held that since the two policies were not stacked, Gallagher v. GEICO was inapplicable and the household exclusion was enforceable. The Superior Court upheld the trial court’s ruling that no coverage was available under the Erie policy.
