In the recent case of Barnard v. Traveler’s Home, No. 42 EAP 2018 (Pa 9/26/19) the Pennsylvania Supreme Court addressed the issue of whether an increase of underinsured motorist coverage limits for multiple vehicles insured under an existing policy constituted a “purchase” pursuant to 75 pa. C.S.A. Sec. 1738(c) of the Pennsylvania Motor Vehicle Responsibility Law such that a new stacking waiver form was required. The Pennsylvania Supreme Court held that a new waiver form was required.
In Barnard, the plaintiff bought an auto insurance policy from Travelers covering two (2) vehicles. With the purchase, the plaintiff bought underinsured motorist coverage in the amount of $50,000.00 per vehicle and waived stacking on the UIM coverage limits. Two (2) years later, plaintiff increased the UIM coverage limits from $50,000.00 to $100,000.00 for each vehicle. No new stacking waiver form was signed by plaintiff when the UIM coverage limits were increased.
Plaintiff was involved in a motor vehicle accident several years later with an allegedly underinsured driver and presented a claim to Travelers for underinsured motorist benefits. The carrier offered her $100,000.00 based upon the UIM coverage limits on one (1) of her vehicles. Travelers would not provide stacked coverage to the plaintiff. Plaintiff then filed a Declaratory Judgment action seeking $200,000.00 in stacked UIM benefits.
The case was filed in the U.S. District Court and was eventually appealed to the U.S. Court of Appeals for the Third Circuit. That Court certified the question to the Pennsylvania Supreme Court for a ruling. The Pennsylvania Supreme Court held that based upon the plain language of Section 1738(c), an increase of UIM coverage limits on multiple vehicles under an existing policy does constitute a “purchase” for purposes of Section 1738(c).
Accordingly, the court ruled that such an increase of UIM coverages required Travelers to offer the insured an opportunity to waive stacking of the increased aggregate amount of UIM coverage. Absent this new waiver of stacking, the plaintiff’s policy would be deemed to provide for stacked UIM coverage.
Questions regarding this case can be directed to Ted Winicov, Esquire.