In Blood v. Old Guard Insurance Co., 2007 WL 4119037 (Pa.), the Supreme Court of Pennsylvania determined how an insured's decision to reduce the limits of his or her liability coverage affects a previous election of uninsured/underinsured motorist (UM/UIM) coverage at a level less than the liability limits established prior to the reduction.

 

Blood was injured in a motor vehicle accident and suffered serious injuries. The vehicle in which he was riding was driven by the owner, who was insured by State Farm. Blood was paid the applicable limits of the owner's policy, which amounted to $25,000. Blood then sought coverage under the policy issued by his insurer, Old Guard.

 

Blood originally had liability limits of $500,000 and UM/UIM limits of $35,000.   Blood decreased his liability limits to $300,000 and made no elections regarding UM/UIM.  Thus, the Pennsylvania Superior Court eventually determined his applicable UM/UIM limits were $300,000.  The lower court was persuaded by the fact that the coverage selection form provided choices for UM/UIM coverage, but the Bloods made none.

 

The superior court concluded that when the Bloods amended their policy in 2000, the effect of their change to the liability limits had the related result of increasing their UM/UIM coverage limits to an equal amount. The court stated that the insurer conceded that there was no rejection of UM/UIM coverage contained within the application, therefore, absent a signed, written election for lesser coverage, the presumed UM/UIM coverage limit was the same as the bodily injury liability coverage limit.

 

According to the Supreme Court of Pennsylvania, the lower court's suggestion that the form was confusing was not persuasive in the face of the Bloods' prior express written election of $35,000 in UM/UIM coverage and the fourteen years of renewal notices and premium payments, which reminded the insureds of the UM/UIM coverage limits in place.

 

The court also noted that the selection of $300,000 in liability coverage was not the only change made by the Bloods on the coverage selection form executed in 2000. The Bloods also specifically rejected income loss benefits coverage by putting an “X” in that choice.

 

Further, the court found no evidence that the insureds requested or desired a change to the UM/UIM coverage provided by the subject policy. The court stated that the lower court should have given effect to their change in coverage and not found an increase resulting from it.

According to the court, the language of the Pennsylvania 's Motor Vehicle Financial Responsibility Law was plain and the Pennsylvania General Assembly's intention was clear. That is, a named insured may lower her statutorily provided UIM coverage limits by the requesting (in writing) of her insurer to do so; and the insurance company's obligation to issue a policy with (UM/UIM) coverage in an amount equal to the policy's bodily injury liability coverage is not relieved unless it has received such a written request.

 

The Supreme Court reversed and remanded the decision of the superior court.