Thought Leadership

In this non-precedential decision, the Pennsylvania Superior Court confirmed the precedent set by prior decisions of the Pennsylvania Supreme Court that substitution of an automobile on an insurance policy does not require that a new waiver of stacked underinsured motorist coverage in order for the previously, valid stacking waiver to remain valid. In this case, Erie had issued an insurance policy to Beutler insuring four vehicles and Beutler had signed a waiver of stacked UIM coverage. Later, Beutler had purchased a new vehicle, replacing one of the four previously listed on the policy. Erie issued an amended policy indicating that the prior auto had been “deleted” and the new auto had been “added.” Beutler later died in a motor vehicle accident and his estate made a claim for stacked UIM benefits under the Erie Policy. Erie brought a declaratory judgment action asking the court to confirm that Beutler’s estate was not entitled to stacked UIM coverage.

The court affirmed the trial court’s grant of summary judgment in favor of Erie where the trial court had held that the original stacking waiver signed by Beutler remained in effect on the date of the accident because when he had substituted the new auto, no new UIM coverage was purchased and a new waiver was not required. The estate argued that Erie’s usage of “deleted” and “added” on the amended declarations page rendered the amendment a purchase of new UIM coverage and not a substitution, requiring Erie to obtain a new executed stacking waiver. However, the Superior Court noted, “[r]egardless of the language used by the amendment, the policy covered four vehicles prior to the amendment and covered four vehicles after the amendment, with exactly the same amount of monetary coverage.”

The Superior Court also affirmed the trial court’s granting of a protective order in favor of Erie, protecting Erie from discovery sought by the estate that would “answer the question of why the . . . amendment indicated ‘AUTO 3 DELETED. AUTO 5 ADDED’ as opposed to using the word ‘replacement’ or ‘replaced’.” While the estate argued that such discovery was reasonably calculated to lead to the discovery of admissible evidence, the Superior Court disagreed and noted that the estate failed to explain how Erie using the word “replacement” would constitute a purchase of UIM coverage and thereby requiring a new stacking waiver.

While this decision of the Superior Court has been marked as “non-precedential,” it is nonetheless available to be cited as persuasive authority. The decision here confirms that the relevant analysis as to whether a new UIM stacking waiver required is the amount of UIM coverage at issue, and whether there has been an expansion or not. What the Superior Court makes clear, however, is that the language used in the policy amendments has no bearing on this analysis.