In a non precedential opinion, the Pennsylvania Superior Court in Erie Insurance Exchange v. Colebank, 1244 WDA 2021 (Pa. Super. April 20, 2022) held that a household exclusion provision in an insurance policy was enforceable against a claimant who rejects underinsured motorist (UIM) coverage for his own vehicle and then sought coverage under his parent’s policies as a resident relative.
The Claimant resided with his parents and specifically rejected UIM coverage under his own policy of insurance with State Farm. His parents had a policy of insurance with Erie that had UIM coverage of $100,000/$300,000 stacked over two vehicles, as well as a second motorcycle policy with Agency Insurance (Agency). Claimant was involved in an accident while occupying his own Jeep Wrangler that did not have UIM coverage. As the host policy on the host vehicle had UIM rejected, he then turned to the Erie and Agency for coverage. Erie denied coverage and filed declaratory judgment actions based on household exclusions in the policy.
Erie argued that because the Claimant knowingly rejected UIM coverage, he was unable to “stack” UIM coverages on the other policies. The Claimant argued that his rejection of UIM coverage should not determine coverage under the parent’s policies, and that he was entitled to stacking as a resident relative. He also relied on Gallagher v. GEICO and argued that the household exclusion was void and against the mandates of the MVFRL. Erie argued that Gallagher was not controlling as “stacking” was not at issue.
The Court enforced the household exclusion in the Erie policy, determining that the Claimant knowingly rejected UIM coverage and that the household exclusion was consistent with the legitimate interests of the MVFRL. Furthermore, since the Claimant rejected UIM coverage on his own policy, Gallagher was not applicable. Finally, the Court determined that since the Claimant did not have stacking on his policy, there was not coverage on which to “stack” the family policy coverages.
Any questions on this opinion can be directed to Jennifer L. Stauffer.
