The Federal Court for the Western District of Pennsylvania recently held that National General’s household vehicle exclusion was invalid even when two different insurance carriers’ underinsured motorist coverage (UIM) policies were involved. National General Insurance Company v. Sheldon, No 1:19-CV-212 (W.D.Pa. Sept. 29, 2020).
Mr. Sheldon was injured in a motor vehicle accident and settled with the third party’s insurance carrier. Sheldon then recovered UIM benefits from the host vehicle’s UIM carrier. The host vehicle was insured for UIM with a different carrier but was a vehicle within Sheldon’s household. Thereafter, Sheldon filed a claim for UIM coverage benefits with National General which insured a different vehicle within the same household. National General denied coverage citing the household vehicle exclusion.
In its Motion for Summary Judgment, National General argued that the Gallagher decision was distinguishable. The carrier argued that Gallagher involved two UIM policies within the household, with the same carrier, versus Mr. Sheldon’s household which had two UIM policies with two different carriers.
In reviewing the Gallagher decision and its progeny, the Western District Court denied National General’s arguments finding that “at its core, Gallagher held that the household vehicle exclusion violates the MVFRL because it is an impermissible waiver of an individual’s choice to select and pay for stacking UIM benefits…no matter who furnishes those benefits, whether it is one insurance company or two.” The Court denied National General’s Motion for Summary Judgment.
Questions regarding this case can be directed to David R. Friedman.
