Northampton County Judge Rejects Household Exclusion And Allows for Stacked Coverage

There continues to be a split of authority in the state and federal courts on whether the Pennsylvania Supreme Court's decision in the Gallagher v. GEICO case serves to eradicate the Household Exclusion in automobile insurance policies across the board or only in certain cases with facts that are analogous to that decision.

In the case of Donegal Ins. Co. v. Ricci-Lombardo, No. C-48-CV-2019-11724 (C.P. Northamt. Co. Oct. 22, 2020 Morganelli, J.), Judge John M. Morganelli of the Northampton County Court of Common Pleas ruled in favor of the insured in response to cross-motions for judgment on the pleadings in a declaratory judgment action brought by the carrier relative to the application of the household vehicle exclusion. 

According to the Opinion, the carrier, Donegal, tried to distinguish the case from the Pennsylvania Supreme Court’s decision in Gallagher v. GEICO on the basis that there was a stacking waiver on a separate motorcycle policy that had been issued by a separate carrier. 

The Court rejected the carrier’s argument and decided to follow the Gallagher v. GEICO decision in which it was held that the household exclusion could not be used as a de facto waiver of stacking since the MVFRL requires insurance companies to secure a signed waiver of stacking from its insureds.  

The Court in this Donegal v. Ricci-Lombardo case also relied, in part, upon the case of Craley v. State Farm Mut. Auto. Ins. Co., and held that the stacking election form that governs in this case is the one from under the Donegal policy. 

The Court ultimately ruled that, since stacking was not rejected in writing under the Donegal policy, then stacking applied.

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

I send thanks to Attorney James Stinsman of the Levin Firm in Philadelphia.