Recently in Powell v. Allstate Property and Casualty Insurance Company, 13-5721 (E.D. July 21, 2014), the Eastern District of Pennsylvania limited the Plaintiff’s recovery of uninsured motorist benefits, rejecting her argument that a vehicle was added to her policy via endorsement. The Court held that the extension of coverage under the newly acquired vehicle clause in the policy was not a “purchase” of new coverage for purposes of stacking under Section 1738 (c). Therefore, this did not trigger an obligation on the part of the insurance company to obtain a new or supplemental UM/UIM stacking waiver.
By way of background, Plaintiff Powell was rear ended by an uninsured driver on March 5, 2011. Powell filed a Complaint asserting an Uninsured Motorist (“UM”) claim against Allstate Property and Casualty Company (“Allstate”). Allstate tendered their $25,000 policy, the Plaintiff accepted the settlement, and the Court dismissed the case as settled. Plaintiff filed a Motion to Strike the Court’s Order of Dismissal, claiming she was entitled to $50,000 in coverage and the parties agreed to decide the issue of UM coverage through a Motion for Summary Judgment.
The named insured on the Powell policy initially waived stacked limits under the Allstate policy for a 2002 Nissan Altima, 2000 Nissan Altima and 1999 Nissan Altima. Later the 2002 Nissan was replaced with a 2006 Nissan Altima. The Powells then added a fourth vehicle to the policy, a 1998 Volvo, and Allstate sent them correspondence noting a premium change. Plaintiff contends a new stacking waiver should have been sent at that time. Plaintiff then dropped the 1999 Altima and the 2006 Altima. At the time of the accident, two vehicles were insured by Allstate. Plaintiff argued that because Allstate did not obtain a signed stacking waiver each time she and her husband added a vehicle to the policy, she was entitled to stacked coverage for the two vehicles on the policy.
The Court held that the Plaintiff was not entitled to stacked coverage and Allstate was entitled to judgment as a matter of law after analyzing the Sackett trilogy. The Court looked at whether the Volvo was added to the policy via endorsement and issuance of an amended declarations page or the newly acquired vehicle clause. The Court held that Sackett II, which stands for the proposition that vehicles added to a policy via a continuous newly acquired vehicle clause do not trigger the need for new sign down sheets, controlled. The Court relied heavily on the recent case affirmed by the Third Circuit: Seiple v. Progressive Northern Insurance Company, 954 F. Supp. 2d 352, 353 (E.D. Pa. 2013), aff’d, No. 13-3213, 2014 WL 2611357 (3d Cir. June 12, 2014).
The Seiple Court applied Sackett II and also held that Sackett III did not create a per se rule that “vehicles added by endorsement require new stacking waivers without regard to the language in the after-acquired-vehicle clause.” Powell at 14 (citing Seiple, 2014 WL 2611357 at *4). The after-acquired-vehicle clause would guarantee coverage to a newly acquired vehicle, subject to conditions such as notice in 30 days, to the insurer.
The Powell Court further noted that the plain language of the after-acquired-vehicle clause in the Allstate policy was similar to the policy in Seiple and “makes explicit that any new auto that Plaintiff acquired during this time would be covered under the policy, provided that the car was not already covered elsewhere and that Plaintiff provided notice to Allstate and paid additional premiums.” Powell at 15.
The Court also noted that the Plaintiff was not entitled to stacked benefits because the newly acquired vehicle clause was continuous and subject only to a notice requirement. The Powell Court held that Sackett I only controls when the terms of an after-acquired vehicle clause are finite in nature, and would require the execution of a new stacking waiver. Because the language of the Allstate policy was continuous in nature and did not set a limit on how long the coverage would apply, the court held that the extension of coverage to the Volvo under the policy was not new coverage under Section 1738(c) and the Plaintiff was limited to recovering non-stacked UM benefits of $25,000.00.