Third Circuit Addresses Sackett UIM Stacking Waiver Form Issue

In an opinion handed down today, May 12, 2009, in the case of State Auto Insurance v. Pro Design, No. 08-3006, the Third Circuit Court of Appeals considered the question of whether new UIM stacking waiver forms must be completed each time an insured adds a vehicle to what was originally a single vehicle policy.

In this case, State Auto Insurance Company filed suit seeking declaratory judgment that insured, who had signed waiver of intra-policy stacking at time he purchased single-vehicle insurance policy, was not entitled to stacking of underinsured motorist (UIM) coverage for accident occurring after additional vehicles were added to policy. The carrier filed a motion for summary judgment.

The District Court, James M. Munley, J., had ruled in favor of the insured, holding that addition of more vehicles to what had been single-vehicle policy was a purchase of multi-vehicle policy that required insurer to obtain waiver of intra-policy stacking. 559 F.Supp.2d 540 (M.D.Pa. 2008).

The Third Circuit reversed and remanded with instructions that summary judgment be entered in favor of the insurance carrier instead. In doing so, the Third Circuit predicted that the Pennsylvania Supreme Court would follow its 2007 Sackett v. Nationwide (Sackett II) decision, holding that the initial stacking waiver remains valid even with the addition of vehicles to a single vehicle policy. See Sackett v. Nationwide Mutual Insurance Co. (Sackett II), 940 A.2d 329, 331 (Pa. 2007).