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Failure to Secure New UIM/UM Form May Give Rise to Coverage

Source: Sackett v. Nationwide Mutual Insurance (Pa.)

Analysis

The Supreme Court addressed the issue of whether auto insurers are required to secure new UI/UM forms on “after acquired vehicles”. Earlier this year, the Supreme Court had held that new forms were required because the new vehicle amounted to a new auto policy. Nationwide sought reconsideration of the Court’s decision. The Insurance Department also filed a brief with the Court in support of reconsideration, arguing that insurers should not have to secure new forms on existing auto policies when a new vehicle is added to the policy. The Court reexamined its decision and modified its prior holding.

In an opinion by Justice Saylor, joined by Cappy, Baer and Baldwin, the Supreme Court held that whether new forms are required for an after-acquired vehicle depends on the type of after-acquired vehicle clause contained in the auto policy. If the clause provides coverage for the after-acquired vehicle for a limited time, then new UI/UM forms must be secured. If the clause provides continuing coverage for the after-acquired vehicle as long as the insured provides notice to the insurer of the addition and pays the required additional premium, then no new forms are required.

What it Means For You

While we believe that most Pennsylvania insurers have the continuing coverage provision, this ruling makes it important now more than ever to ensure that policies and procedures are kept up to date with evolving case law. Because any coverage decision is time sensitive, this ruling should give guidance for timely disposition of this coverage issue when presented. As with most coverage interpretations, though, there is room for further debate. While the Court suggests that there should be no difference for after-acquired vehicles on a single vehicle policy, that issue is not expressly addressed. As such, it is likely that future litigation of this issue will arise. For that reason, it will be imperative to monitor this line of cases. The attorneys at Cipriani & Werner can assist you with all of your UIM/UM and related motor vehicle issues.

About C&W

Cipriani & Werner is a professional corporation providing civil litigation and workman's compensation legal services to clients throughout Pennsylvania and New Jersey. If you have questions, feel free to contact at (412) 563-2500.

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Motor Vehicle