Pennsylvania's justices on Wednesday declined to take a more expansive view of a statute dictating when auto insurance customers can waive stacking benefits. In a unanimous 12-page opinion, the Supreme Court determined that deleting a vehicle from an insurance policy does not create the same renewed chance to waive stacking that adding coverage for an additional car does. The case is Franks v. State Farm Mut. Auto. Ins. Co., 2023 Pa. LEXIS 525 (Pa. 2023).
"It's certainly going to limit the ability of claimants to recover, and it shifts the burden from the insurance companies onto those claimants to comply with the law," said James Hockenberry, a partner with the Law Office of Leon Aussprung who represented the plaintiffs.
The ruling rejected the argument from plaintiffs Robert and Kelly Franks that removing a vehicle from their policy constituted a "purchase." Therefore, the plaintiffs argued, their previous waiver of uninsured and underinsured motorist coverage stacking no longer applied under Pennsylvania's Motor Vehicle Financial Responsibility Law.
Under the MVFRL insureds are entitled to uninsured and underinsured motorist coverage stacking unless they waive the benefit when they purchase coverage. But based on the statute's plain language, the court ruled the term "purchase" cannot be expanded to include any change in policy.
"The removal of a vehicle from coverage under a multi-vehicle policy under conditions that do not alter the pre-existing coverage or costs relative to the remaining vehicles is not a purchase requiring a renewed express waiver," opinion author Justice Sallie Mundy wrote.
The conclusion fell in line with arguments from the defendant, State Farm Mutual Automobile Insurance Co., which said the language of the MVFRL and past precedent dictated that a purchase involves an insured obtaining something they did not already possess.
Michael Saltzburg of Bennett, Bricklin & Saltzburg represented State Farm and did not respond to requests for comment.
The plaintiffs in the case claimed State Farm should have paid $200,000 in coverage for Robert Franks' 2016 accident with an uninsured driver—double the amount State Farm had offered.
The plaintiffs' appeal sought to overturn a split decision from an en banc Superior Court panel in favor of the insurer.
Hockenberry said the high court's ruling stands to affect a sizable group of policyholders. "In multiperson households, it's pretty common to purchase new cars and for the number of cars to go down on a policy," he said.
Cases grappling with the ins and outs of UI/UIM coverage under the MVFRL have made frequent appearances before the Supreme Court in recent years.
According to Hockenberry, many of the court's decisions have favored plaintiffs and claimants. With Wednesday's pro-insurer ruling, however, he said, "They may be reigning that in a little bit."
Editor's Note: What the policyholders called a "removal" in this case was really the replacement of one vehicle already covered by the policy in question with another. As State Farm pointed out, neither the coverage nor the charges outlined in the policy changed. Both before and after they replaced one of the vehicles, the policyholders were paying for coverage on two autos. Since they were paying the same amount for the same coverages, it didn't make sense for them to have another opportunity to waive or accept UM/UIM stacking.
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Aleeza Furman
Aleeza Furman is a Philadelphia-based editor covering legal technology. Contact her at [email protected].