Defense Digest

No New UM/UIM Forms With Policy Changes On Renewal

The battles in Pennsylvania regarding new UM/UIM forms or signatures on the forms continues with the insurance industry obtaining a recent victory.

The Pennsylvania Superior Court recently held that an insurer did not have to obtain new UM/UIM stacking forms each time a vehicle was added to the policy in Sackett v. Nationwide Mutual Insurance Company, 2005 Pa. Super. 262, 880 A.2d 1243 (2005).

In Sackett, Victor Sackett suffered injuries as a passenger in a car driven by Robert Bulger in an accident on August 5, 2000. His injuries were considered quite serious. After obtaining the tortfeasor's limits and the Bulger's UIM coverage, Sackett sought UIM coverage under his own policy with Nationwide.

Sackett had originally purchased the Nationwide policy in August 1998, insuring two vehicles with UIM limits of $100,000 per person. He had signed a waiver rejecting stacking at that time. Shortly before the accident in 2000, Sackett added a third vehicle to his policy. No new stacking waiver form was requested by Nationwide or signed at the time new car was added to the policy. Sackett argued that Nationwide was obligated to provide him with a new stacking waiver form upon the change to his policy, and, therefore, he was entitled to stack his UIM coverage to $300,000 ($100,000 per vehicle) because the insurer failed to provide the form.

Nationwide rejected this argument, and Sackett filed suit. Discovery was completed, and Nationwide filed a Motion for Summary Judgment, arguing that it had no duty to offer a waiver of stacking form each time a vehicle was added to the policy since it did not constitute a material change. Moreover, Nationwide argued that the Pennsylvania Motor Vehicle Financial Responsibility Law provided no remedy for an insured as a result of the failure of an insurer to obtain a valid rejection of stacked UIM coverage. The trial court granted summary judgment in favor of Nationwide. Sackett appealed.

On appeal, the Pennsylvania Superior Court rejected Sackett's argument and held that once the waiver of stacking was executed, it was effective regardless of subsequent changes to the policy, including the addition of another vehicle to the policy. The court did not address Sackett's final issue on appeal, concerning whether or not the MVFRL provided a remedy for Nationwide's failure to obtain a new waiver of stacked UM/UIM coverage.

The Pennsylvania courts continue to struggle with the numerous scenarios arising out of the various UM/UIM forms and the subsequent automobile accidents. We fully expect that these critical battles will continue in late 2005 and 2006 with a significant impact on the insurance industry with greater exposure being at risk.

*Doug is a shareholder in our Philadelphia, PA office. He can be reached at (215) 575-2605 or dkent@mdwcg.com.