Western District of Pennsylvania Addresses Inter-Policy Stacking Issues

The Federal District Court for the Western District of Pennsylvania addressed the amount of UIM coverage owed to Plaintiff in an inter-policy stacking case in  Costa v Progressive Preferred Insurance Company, No.2:16-cv-74 (W.D. Pa. June 10, 2016)

The decedent was killed while riding as a passenger in a single vehicle accident. The decedent was an “insured” under three policies:

(1) a policy issued to decedent’s father by Safeco which provided UIM coverage of $100,000.00, stacked;

(2) a policy issued to decedent’s mother by Erie which provided UIM coverage $100,000.00 non-stacked, and

(3) a policy issued to decedant’s mother by Progressive which provided UIM coverage of $50,000.00 non-stacked.  Decedent’s mother signed a “waiver of stacking” form relative to the Progressive policy.

Decedent’s estate settled with the carrier for the tortfeasor driver.   Thereafter Safeco and Erie tendered their policy limits which were accepted by the decedent’s estate.  Progressive offered $20,000.00 taking the position that its policy’s “Other Insurance” clause limited Progressive’s exposure to its pro rata share of the largest applicable single-vehicle UIM policy limit which was $100,000.00.  Progressive calculated the $20,000.00 figure by adding up all of the UIM coverage available to decedent and determinined its share of the total, ($50,000.00 over $250,000.00 = 20%).

Progressive pointed to the “Other Insurance” provision in its policy which states:

If non-stacked coverage is shown on the declaration page and this policy is in the Second priority, the maximum recovery under all policies in the Second priority shall not exceed the highest applicable limit for any one motor vehicle under any one policy in the Second priority.

The Court noted that the Safeco, Erie and Progressive policies were all in the second priority of coverage.  The largest single-vehicle UIM policy limit was $100,000.00.  Progressive offered the maximum amount required $20,000.00, pursuant to the “Other Insurance” provision of its policy covering the decedent.   The administrator filed suit to collect the remainder of the Progressive UIM policy limits, $30,000.00.

Progressive filed Motion for Summary Judgement contending the estate recovered the maximum amount available to Plaintiff under the Progressive UIM policy.   The Court agreed with Progressive finding that the “Other Insurance” provision of the Progressive policy is the type of provision necessary to effectuate the waiver of inter-policy stacking, which the PA Supreme Court expressly permits.  The Court cited Craley v State Farm, 895 A. 2d 530, 539, (PA 2006).   The Court held that Plaintiff was bound by the waiver of inter-policy stacking in the Progressive policy.  Through operation of the Progressive policy’s “Other Insurance” clause, Progressive had properly paid out UIM limits to Plaintiff.  Summary Judgement was also granted in Progressive’s favor for Plaintiff’s breach of contract and bad faith claims.

Questions related to the case can be directed to Joe Crane.

Joseph P. Crane III

Office: King of Prussia
Phone: (610) 977-2975
Email: jcrane@forryullman.com
Practice Areas: Motor Vehicle Accidents, Products Liability,
Slip and Falls, Subrogation, UM/UIM, Workers’ Compensation
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