Removal of Car From Policy Does Not Require Carrier to Secure New Waiver of UIM Stacking Form

In the case Franks v. State Farm Mut. Ins. Co., 93 Bucks Co. L. Re. 6 (C.P. Bucks Co. Nov. 18, 2019, McMaster, J.), the court ruled in favor of the carrier in a declaratory judgment action involving UIM coverage and stacking issues.

The court noted that the issue before it appeared to involve a case of first impression, that being the issue of whether, under the MVFRL, is there a “purchase” of insurance when an insured removes a vehicle from their policy, thereby reducing the number of cars subject to a stacking requirement.

The court held that, under the Pennsylvania Motor Vehicle Financial Responsibility Law, State Farm was not obligated to offer its insureds the opportunity to waive stacking of underinsured motorist coverage when the insureds removed a vehicle from an already existing policy.

The court noted that, under 75 Pa. C.S.A. §1738(c), an insurance company must offer an insured the opportunity to waive stacking of UIM limits whenever an insured purchases UIM coverage for more than one vehicle under a policy.

The court noted that that the determination of the outcome of this case fell upon the definition of the word “purchase” under the statute.

The court applied the rules of statutory construction that words that are clear and free from all ambiguity to be applied in their ordinary and common usage.

The court reviewed other cases, including Sackett I, and found them not be to directly on point as the prior cases dealt with facts involving the increase of the number of vehicles on a policy or switching out vehicles on a policy.

The court noted that, while affirmatively adding a vehicle to an insurance policy requires the signing of a new waiver, the modification of an already existing policy does not.

In this case, the court indicated that it was dealing with the removal of vehicles from the policy and decreasing policy premiums. The court noted that a removal of a vehicle from the policy constituted a modification of a policy, and not a “purchase” of a new vehicle.

Accordingly, the court held that, removing a vehicle from an already existing policy, should not trigger the requirement that a carrier secure a new waiver of stacking when issuing the revised policy.
As such, in this Rule 1925 Opinion, the trial court recommended to the Superior Court that the Plaintiff’s appeal be quashed or denied.

Anyone wishes to review a copy of this decision may click this LINK.

I send thanks to Attorney John K. Shaffer of the Plymouth Meeting, Pennsylvania law offices of Lester G. Weinraub for bringing this case to my attention.