Superior Court Finds That UIM Claim Fails Under Terms of an Umbrella Policy

In the case of Mathews v. Ace Prop. & Cas. Ins. Co., No. 638 EDA 2025 (Pa. Super. Sept. 4, 2026 Stevens, P.J.E., Stabile, J., Lane, J.) (Op. by Stevens, P.J.E.), the Pennsylvania Superior Court addressed the issue of whether an umbrella policy applied to provide underinsured (UIM) motorist benefits to a Plaintiff.

According to the Opinion, the Plaintiff suffered severe injuries as a result of being hit by a car while crossing the street.  The Opinion noted that the driver involved was underinsured.

According to the Opinion, there was an insurance policy issued to the Plaintiff’s employer that entitled the Plaintiff to UM/UIM benefits.However, the Plaintiff was denied any excess benefits under his employer’s umbrella policy. 

The Plaintiff brought suit for breach of contract and for a declaratory judgment on the issue of UIM coverage under the umbrella policy.

The trial court had entered judgment on the pleadings in favor of the umbrella carrier.  On appeal, the Superior Court affirmed.

The Superior Court noted that the plain and express terms of the umbrella policy, including exclusions, limited the umbrella coverage to third-party claims only.

The Superior Court rejected the Plaintiff’s efforts to argue that the policy language was ambiguous. The Plaintiff had attempted to argue that the umbrella policy contained an endorsement indicating that coverage for bodily injury would follow the terms of any underlying insurance.

However, as noted, other language in the umbrella policy specifically limited the umbrella insurance coverage to third party claims.

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


Source: Pa. Super. Blog (pasuperblog.substack.com) by Attorney Jon Bruno of Bruno Litigation, LLC in Pittsburgh, PA.

Source of image:  Jean-Phillipe Delberghe on www.unsplash.com.
 

Issues of Fact Preclude Summary Judgment on Excess Coverage Issue

In the case of Farber v. Erie Insurance Exchange, No. 19-CV-2302 (C.P. Lacka. Co. July 8, 2020 Nealon, J.), the court addressed coverage issues pertaining to whether an excess/umbrella policy was precluded by an exclusion. In the end, after finding that the insurance company had not established its position in a fashion that was free and clear from any doubt, the carrier’s Motion for Summary Judgment on the issues presented was denied. 

By way of background, a boat owner, who had been sued in a wrongful death lawsuit involving the use of his motorboat, instituted a coverage action against his excess/umbrella carrier asserting claim for breach of contract, declaratory judgment, bad faith, and violations of the Unfair Trade Practices and Consumer Protection law. 

According to the Opinion, the excess/umbrella policy contained a watercraft exclusion that provided temporary insurance coverage for watercraft “acquired during the policy period,” but that liability coverage “ceases” to exist, if notice is not given [by the insured] within thirty (30) days” of “the date of acquisition” of the watercraft.

According to the record before the court, the insured gained possession of the motorboat on August 5, 2017 and paid the seller for its purchase on August 18, 2017. 

The Commonwealth of Pennsylvania issued title to the boat in the insured’s name on September 6, 2017. 

The fatal motorboat accident occurred on September 26, 2017. 

The carrier filed a Motion for Summary Judgment arguing that the insured has “acquired” the motorboat when he took custody of it on August 5, 2017 and asserted that, as such, the excess/umbrella coverage was allegedly precluded by the watercraft exclusion since the thirty (30) day temporary coverage purportedly lapsed on September 4, 2017, which would have been several weeks before the subject incident. 

Judge Nealon noted that the carrier had drafted the policy in utilized words such as “acquired” and “acquisition,” rather than words like “possessed” or even “purchased,” in establishing the dates for commencement and cessation of temporary liability coverage for watercrafts. 

The court also noted that the terms utilized by the carrier in the policy were not defined within the policy. 

Turning to ordinary dictionary definitions of the undefined words led the court to conclude that the words used by the carrier mean gaining “ownership” or the “power of disposal” of the watercraft. 

The court also noted that the state regulations indicate that a purchaser of a boat becomes the lawful owner upon obtaining title to the boat. 

Since the court found that different interpretations of the terms at issue gave rise to an ambiguity, and since Pennsylvania law requires that all ambiguities be construed in favor of the insured, Judge Nealon found that the carrier had not established, in a fashion that was free and clear from doubt, that the carrier was entitled to judgement on the question of coverage. As such, the Motion for Summary Judgment filed by the carrier was denied. 

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

Judge Gibbons of Lackawanna County Reaffirms That MVFRL Does Not Apply to Excess or Umbrella Policies

In his recent Opinion in the case of Ranocchia v. Erie Insurance Exchange, No. 2014-CV-4555 (C.P. Lacka. Co. Nov. 25, 2015 Gibbons, J.), Judge James A. Gibbons of the Lackawanna County Court of Common Pleas granted summary judgment in favor of Erie Insurance in a declaratory judgment matter on the issue of whether the Pennsylvania Motor Vehicle Financial Responsibility Law applies to and provides underinsured motorists benefits under and excess insurance policy containing both and expressed exclusion of such UIM benefits and legally deficient waivers of UIM benefits.  

In this matter, the Defendant carrier asserted that the MVFRL simply does not apply to excess insurance policies.   The Defendant carrier also asserted that, even if the Pennsylvania law does allow for UIM benefits under an excess liability policy, a provision in the excess policy expressly excluding UIM benefits prevents the Plaintiff from recovering any UIM benefits under that policy.  

The Plaintiffs countered with an argument that the waivers of UIM coverage provided by the Defendant relative to the excess liability policy created and ambiguity thereby requiring a reformation of the policy.  Stated otherwise, the Plaintiffs asserted that UIM benefits should be considered to be a part of the excess liability policy until waivers of UIM coverage were secured.  The Plaintiffs asserted that, because the waivers in this matter were invalid, the Plaintiffs were entitled to recover UIM benefits under the excess liability policy.  

In his decision, Judge Gibbons ruled that, while this precise issue “[w]hile this precise issue has never been addressed by our appellate courts, we are persuaded by existing case law regarding the MVFRL’s inapplicability to excess insurance policies that Defendants are entitled to summary as a matter of law.”  

In his Opinion, Judge Gibbons primarily rested his decision on the settled law that the MVFRL does not apply to excess or umbrella policies.  As such, there are no UIM requirements applicable to excess or umbrella policies.  

Where the excess policy, as here, clearly provided that it did not apply to UIM coverage, the inclusion of UIM rejection forms, although inconsistent with the expressed language of the policy indicating that there was no UIM coverage, did not create an ambiguity.   Accordingly, the court granted the Defendant carrier’s Motion for Summary Judgment.  

Anyone desiring a copy of Judge Gibbons' decision may click this LINK.

The Plaintiff has filed a Notice of Appeal from this decision.