Crawford County Court Addresses Priority of UIM Coverages

In the Crawford County Court of Common Pleas case of State Farm Mut. Auto. Ins. Co. v. Donegal Mut. Ins. Co., XXX Crawford Co. L. J. 52 (2013 Vardaro, P.J.), President Judge Anthony J. Vardaro recently issued an Opinion deciding a dispute between insurers regarding their respective pro rata share obligations for an underinsured (UIM) motorists benefits payment.

In the State Farm v. Donegal case, the injured victim/insured resided with her parents and was operating their vehicle with their permission when she was struck by the tortfeasor defendant driver.

According to the Opinion, there were two vehicles on parents' State Farm policy under which there was $25,000 in stacked UIM coverage.

The injured victim also had her own policy with Donegal that had $100,000 in UIM coverage, but no stacking,

After obtaining the tortfeasor's liability limits, the UIM claims made against State Farm and Donegal settled for 90,000 of which State Farm paid 50,000 and Donegal paid 40,000.

State Farm then sought a pro rata contribution from Donegal by arguing that the second vehicle on the parents' State Farm policy should be considered "secondary" and therefore of equal priority with the  Donegal policy.

After review the policy language and applicable law, the court rejected State Farm's argument.  After  citing to 75 Pa.C.S.A. Section 173, other case law, and the Pennsylvania Association for Justice's Pennsylvania Motor Vehicle Insurance book by James. R. Ronca, Esq., et al., the court held that both vehicles under State Farm's policy are to be considered first priority and the Donegal policy is solely second priority.  As such, the court rejected State Farm's pro rata request and granted defendant Donegal's motion for summary judgment.

Anyone wishing to review this Crawford County Court of Common Pleas decision in the case of State Farm v. Donegal may click this LINK.

I send thanks to Attorney Bill Mabius of the Pennsylvania Association for Justice for bringing this case to my attention.