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INSURANCE -FINACIAL RESPONSIBILITY LAW-UIM-STACKING-HOUSEHOLD EXCLUSION

Erie Ins. Exch. v. Baluch, Pa. Super. LEXIS 3 (Pa. Superior Ct., January 3, 2025)(Panella, PJE)

OPINION BY PANELLA, P.J.E.: The issue in this case is whether an insured is entitled to stacked UIM benefits although another household policy excludes vehicles that are insured under the policy from the definition of “underinsured motor vehicles.” We disagree with the Appellee that the present case is controlled by Wolgemuth v. Harleysville Mut. Ins. Co., 370 Pa. Super. 51, 535 A.2d 1145 (Pa. Super. 1988) (en banc) and Newkirk v. United Servs. Auto. Ass’n, 388 Pa. Super. 54, 564 A.2d 1263 (Pa. Super. 1989). The Wolgemuth and Newkirk decisions stand for the proposition that liability coverage and primary underinsured motorist (“UIM”) coverage cannot come from the same policy. This is not the situation here, which involves secondary UIM coverage stacked on primary UIM coverage from a separate policy. When an insured has their own motor vehicle insurance policy that provides stacked UIM coverage they are entitled to stack UIM coverage from other household policies unless they expressly choose to waive stacked coverage. See 75 Pa.C.S.A. § 1738(a). Here, the insured elected and paid for stacked UIM coverage under her own separate policy. Erie Insurance Exchange’s limited definition of “underinsured motor vehicle” acted as a disguised waiver of UIM coverage and therefore, is invalid.

The issue in this case is not whether Baluch is entitled to primary UIM benefits but rather whether she is entitled to stacked UIM benefits. The cases relied upon by the trial court and Erie, however, Wolgemuth and Newkirk addressed only a single insurance policy, and thus, stacking UIM coverage was not at issue. In other words, the present case concerns whether Baluch can stack UIM coverage where Wolgemuth and Newkirk involved whether the insured was entitled to UIM benefits in the first instance. When read closely Wolgemuth and Newkirk do not control the instant case.

The stepfather was underinsured because his liability coverage did not fully compensate Baluch. There was no UIM stacking waiver form, mandated under 75 Pa.C.S.A. § 1738(d)-(e), associated with either Policy 1 or Policy 2. Instead, the insureds under Policy 1 and Policy 2 both elected and paid for stacked UIM coverage. Thus, absent the household vehicle exclusion, Baluch would be entitled to stacked UIM coverage from Policy 1. “One of the insurance industries’ age-old rubrics in this area of the law is that an insured should receive the coverage for which he has paid.” Id. at 138. Here, Baluch paid for stacked UIM coverage and thus, was entitled to such coverage. The definition of “underinsured motor vehicle” in Policy 1 acted as a disguised waiver of stacking. Such disguised waivers cannot prevent an insured from recovering UIM benefits and are invalid. See Mione, 289 A.3d at 531 (“the MVFRL precludes any clause that acts as a disguised waiver of stacking by skirting Section 2025 Pa. Super. LEXIS 3, Page 6 of 6 1738’s express waiver requirements.”) (footnote omitted). Therefore, we are constrained to conclude the trial court erred as a matter of law in granting Erie’s motion for judgment on the pleadings and denying Baluch’s cross-motion for judgment on the pleadings. Accordingly, we reverse the trial court’s order. Order reversed.