Insurance Law

PA Supreme Court Sacks Insurers on Stacking

By Richard T. Victoria

Today's holding requires what the plain language of the statute states: when an existing insured purchases uninsured or underinsured motorist coverage for more than one vehicle under a policy, the named insured must be provided with the opportunity to waive stacking of that coverage. Despite what Appellee suggests, today?s holding does not extend to circumstances where an existing named insured simply replaces a vehicle, or renews an existing policy. Such changes are not purchases of coverage within the meaning of Section 1738.

Thus, even if an insured has already rejected stacking of the uninsured/underinsured coverage in his or her automobile insurance policy, if an additional vehicle is added to the policy, the prior rejection of stacking does not apply to the additional vehicle. Instead, an insurer must give the named insured another opportunity to waive the stacked limits.

Sackett appears to place a new and perhaps significant burden on automobile insurers and insurance agents in Pennsylvania and may open the doors to additional coverage for policyholders attempting to access their policies UM/UIM benefits.

Justice Castille wrote a dissenting opinion.

Full post as published by INSURANCE LAW NOTES on May 04, 2007 (boomark / email).