In Barnard v. Travelers, E.D. Pa, Feb. 5, 2018, the Federal Court for the Eastern District of Pennsylvania held that a carrier is required to obtain a signed written waiver of stacked uninsured motorist, (“UM”), or underinsured motorist , (“UIM”), benefits when a policy holder increases their limit of such benefits. UM/UIM coverage pays an injury victim’s damages if the at-fault party in the accident had no, (UM), or inadequate, (UIM), liability insurance. Under the Pennsylvania Motor Vehicle Insurance Law, (“MVFRL”), an insured is entitled to stack their limits of UM and UIM benefits, meaning that they can multiply their limits by the number of vehicles insured under the policy. However, a policy holder can waive their right to stack in return for a reduction in premium by signing a written waiver that is prescribed at 75 Pa.C.S. Section 1738 of the MVFRL.
In Barnard, plaintiff purchased automobile insurance with the Travelers for two vehicles in 2007. The policy provided UM/UIM limits of $50,000.00 per person, and plaintiff signed a written waiver of stacking. In 2009, plaintiff increased her limits of UM/UIM benefits under the policy to $100,000.00 per person, but did not sign a written waiver of stacking at that time.
In 2016, plaintiff was seriously injured in a car accident with a third party motorist who only had a liability limit of $15,000.00. The third party motorist’s insurance carrier tendered their liability limit of $15,000.00, and plaintiff made a claim for UIM benefits under her policy. The Travelers tendered the per person limit of UIM benefit in the sum of $100,000.00, but Plaintiff claimed that she was entitled to stack her UIM benefit because she had not signed a written waiver of stacking when she increased her limit of UIM benefits in 2009. Section 1738 (c) of the MVFRL requires a carrier to obtain a signed written waiver of stacking when an insured purchases UIM coverage. The court held that the increase in UIM limit in 2009 from $50,000.00 per person to $100,000.00 per person, for which plaintiff paid additional premium, constituted a purchase of UIM coverage, thus requiring a written waiver of stacking. Because The Travelers failed to obtain a signed written waiver of stacking at that time, the court held that plaintiff was entitled to stack her UIM benefit limits.
Opinion by McHugh, J.