A decedent’s estate may not stack UIM benefits because the decedent was not occupying a covered auto at his time of death. The case is Owners Ins. Co. v. Walsh, 134 F.4th 776 (4th Cir. 2025).
What Happened
In March 2022, Edward Walsh died while riding his lawnmower after he was struck by a vehicle. His estate filed a claim with the owner of the other vehicle. After those limits were exhausted, Walsh’s estate filed a UIM claim under his personal auto policy, which had been issued by Owners Insurance Company. The policy listed two different vehicles in the declarations, each with a total of $150,000 in UIM coverage. The estate requested the limits for each vehicle.
The policy terms obligated Owners to pay the limit for a single auto, and Owners fulfilled this obligation. However, the insurer declined to pay the limit for the second auto because the estate could not stack coverage. Owners declined to reconsider its decision.
The Suit
Owners filed for a judicial declaration that the company had no responsibility to pay the UIM limits for the second vehicle on the policy. The estate filed a counterclaim for breach and bad faith. The trial court found that the terms of Walsh’s personal auto policy did not permit stacking and ruled in favor of Owners. The estate appealed.
What is a “Vehicle”?
Under S.C. Code Ann. §38-77-160, there were two categories of insureds who could receive UIM benefits from an auto policy: Class I insureds, whose vehicle was actually involved in the accident, and Class II insureds, who did not have a vehicle involved in the accident. The estate’s entitlement to the second UIM payment under Walsh’s policy turned on whether Walsh, at the time of his death, was a Class I or Class II insured. That question, in turn, depended on whether a riding lawnmower could be considered a “vehicle” in the context of the state statute.
Walsh’s policy included “farm implements or other land motor vehicles” in its definition of “automobile.” The trial court had determined this definition meant it was unnecessary to consider the state law definition of “motor vehicle,” which encompassed “every self-propelled vehicle which is designed for use upon a highway” (S.C. Code Ann. §38-77-30(9); emphasis added).
The estate argued that the lawnmower was considered “an automobile” under Walsh’s policy, which meant it also counted as a “vehicle” within South Carolina law. Owners, on the other hand, claimed that S.C. Code Ann. §38-77-30(9) meant a “vehicle” had to be “designed for use upon a highway” in order to qualify as a motor vehicle.
The judges took a different approach: it was not wholly relevant, whether the lawn mower was or was not a “vehicle” or “motor vehicle,” because it was undisputed that “it was neither insured nor legally required to be insured.” They went on to reference two cases, Continental Insurance Co. v. Shives, 492 S.E.2d 808 (S.C. Ct. App. 1997) and Brown v. Continental Ins. Co., 434 S.E.2d 270 (S.C. 1993), where the Court of Appeals of South Carolina and the Supreme Court of South Carolina, respectively, held that stacking was not permitted for uninsured vehicles. Even if the lawnmower could have been considered a “vehicle,” it does not automatically follow that Walsh’s estate would have been entitled to stacking, based on the language in Walsh’s policy.
Policy Terms
The Walsh estate’s entitlement to stack coverage depended on the terms of the late Mr. Walsh’s auto policy with Owners. The estate immediately pointed to Ruppe v. Auto-Owners Insurance Co., 496 S.E.2d 631 (S.C. 1998). In that case, the Supreme Court of South Carolina had determined that "the presumption of South Carolina law is that an insured may stack coverage for which he has paid unless the insurer points to an explicit and unambiguous exclusion or limitation to the contrary." According to the estate, since Owners did not point to a specific policy provision that precluded stacking, then the estate was entitled to the coverage for the second listed vehicle on the late Mr. Walsh’s policy.
The judges disagreed. The estate, they said, had simply interpreted the Ruppe decision too broadly and was interpreting the language as presumptive, rather than permissive. The estate had conceded that Walsh was not occupying an auto at the time of his death. The language of the UIM policy provisions in Walsh’s policy provided that, when an insured suffered injuries “while not occupying any automobile,” the policy limit would be equal to “the highest limit applicable to any one … automobile.”
Despite the concession, the estate maintained that stacking was permissible “absent an explicit and unambiguous exclusion or limitation to the contrary.” No such provision could be found in Walsh’s policy, so stacking the coverage for the vehicles listed in Walsh’s policy declarations was allowed, and Owners owed the estate an additional $150,000.
But the issue was not so simple, said the court. The UIM provisions of Walsh’s policy stated that liability limits weren’t affected by the number of vehicles listed in the declarations unless the policy stated otherwise in a specific subsection of the UIM coverage part. That specific subsection described “four specific accident circumstances” that were each attached to a separate UIM limit. Two of those circumstances, the ones that permitted stacking, required the insured to be occupying an auto owned by either the insured or a relative of the insured. The other two circumstances–not occupying an auto at all or occupying an auto not owned by the insured or a relative of the insured–were limited to “the highest limit available” for a single auto under the policy in question. When read together, the statement about limits being unaffected by the number of autos in the Declarations unless a specific subsection said otherwise and that specific subsection “interlocked to prohibit stacking except as expressly provided” in the specified subsection.
The judges acknowledged that Walsh’s policy was “frankly a dense one.” But even a dense policy cannot be interpreted against the plain language of its provisions. Stacking UIM coverage was clearly precluded unless the insured had been occupying the covered auto or an auto owned by a relative. Walsh had not been occupying an auto at the time of his death, so it was impermissible for his estate to stack the UIM benefits of Walsh’s personal auto policy.
Conclusion
The court pointed out that Owners had actually paid the estate $150,000 in UIM benefits, which it was obligated to do per the terms and conditions of Walsh’s policy. Unfortunately for Walsh’s estate, the policy terms prohibited stacking, and the court would not–could not–twist the language to say otherwise.
The judgment of the trial court was affirmed.
Editor’s Note: Stacking occurs when the limits of an underlying policy have been exhausted, and the insured has more policies in place for coverage. Coverage may be stacked horizontally or vertically. In a horizontal stacking situation, the insured has multiple excess policies at different levels of priority. All of the policies on the first level of priority must be exhausted before any second level or higher policy will be triggered. For vertical stacking, exhaustion of the underlying policy’s limits is the trigger for all of the excess policies attached to it.