Change in Liability Coverage Does Not Alter UIM Insurance

Posted on: July 10th, 2012       Attorney Thomas Newell

On March 25, 2011, the Pennsylvania Superior Court ruled against PA car accident victims who were seeking additional underinsured motorist benefits.  A Bucks County resident insured 3 motor vehicles with Nationwide with liability limits of $100K/300K and UM/UIM limits of $15K/$30K.  He later amended his coverage to $25,000/$50,000 for both liability as well as UM/UIM.

The UIM claimant later obtained a new vehicle that required a bodily injury limit of $100K/$300K.   He sent Nationwide a form requesting that change and concluded with this language:  “leave other coverage the same and add lease holder as requested.”  When his wife and mother-in-law suffered serious injuries in a subsequent accident, they demanded UIM coverage equal to the liability limit of $100K/$300K.

Nationwide denied the underinsured motorist claim and filed a declaratory judgment action in the Court of Common Pleas in Bucks County.  The trial court ruled in favor of Nationwide as did the Appeals Court.  The Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) did not require Nationwide to give the policyholders another opportunity to raise their UIM limits when they increased their bodily injury liability benefits under an existing policy.  The Bucks County ruling of UIM payments of $25,000.00 to each UIM claimant was upheld.  PA Superior Court Grants Stacking to UIM Victim

Nationwide did not offer nor obtain a new stacking waiver to be signed by either of the plaintiffs. The husband was injured in a car wreck while a passenger in another car. He obtained the defendant’s policy limit and the UIM limits of the automobile he was in. He then made a UIM claim of stacking for all 3 vehicles insured under his Nationwide automobile insurance policy. The court ruled that once the new vehicle was added, Nationwide was required to obtain a new signed waiver form to prevent a stacking claim. Since they did not, the car crash victim was able to stack all three $100,000.00 UIM policy limits.