September 28, 2014

Superior Court Sides With Insureds on Stacking Issue


The Superior Court’s June 6, 2014, decision in Bumbarger v. Peerless Indemnity Insurance Company,93 A.3d 872 (Pa.Super. 2014)affirmed an order granting summary judgment thereby entitling an insured to stacked uninsured motorist (“UM”) coverage, despite the prior execution of valid waiver forms that complied with the provisions of the Motor Vehicle Financial Responsibility Law. This issue arose when the insured added an additional vehicle to her policy. At the policy inception, the insured executed forms rejecting stacking of uninsured/underinsured motorist (“UM/UIM”) coverage on her two vehicles. Thereafter, the insured added a third and then a fourth vehicle to the policy. Neither vehicle replaced the original two vehicles, which remained on the policy. Upon purchasing vehicle three, the insured called her agent requesting that vehicle three be added to the policy. The agent then notified the insurer, who added vehicle three to the existing policy through a validly executed endorsement which indicated the insured had non-stacked uninsured coverage for the new vehicle. Upon purchasing vehicle four, the insured took the same action; however, vehicle four was added to the policy by an amended declarations page which reflected the addition.                                                                                                                                                                     

Approximately two months after vehicle three was added to the policy, the insured, while in vehicle three, was involved in an accident with an uninsured motorist. The insured claimed stacked UM benefits; the insurer disagreed, relying on the original waiver of stacked UM/UIM benefits executed at the policy inception. The insured filed a breach of contract action against the insurer, which resulted in summary judgment in favor of the insured. The trial court held that because vehicle three was added to the policy via endorsement, the insurer was required to obtain a new stacking waiver.

 On appeal to the Superior Court, the insurer argued that vehicles three and four were added to the existing policy through the newly acquired auto clause and, thus, it was not required to obtain new waiver forms. The court rejected this argument, finding that the newly acquired auto clause was not triggered where the third vehicle was added by endorsement at time of purchase onto the declarations page of the policy. While not at issue, the court also pointed out that vehicle four, which was added to the declarations page by amendment rather than through endorsement, would presumably require the insurer to offer new stacking waivers, as well.

What It Means to You


To prevent challenges to denial of stacking, obtain a new waiver for a newly acquired auto that does not replace a vehicle shown in the declarations.