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Auto Insurance: Increase in UIM Policy Limit Considered a ‘Purchase’ Requiring New Stacking Waiver

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Federal Court Ruling on Under Insured Motorist (UIM) Benefits

On February 5, 2018, the federal District Court for the Eastern District of Pennsylvania ruled that increasing Under Insured Motorist (UIM) benefits counts as a new purchase of insurance coverage. Therefore, automobile insurance carriers must obtain a new waiver of stacked benefits under the auto insurance policy.

Stacked Benefits in UIM Coverage

Stacked benefits in UIM coverage mean that a person who buys automobile insurance for more than one vehicle under the same policy can choose to purchase up to double the UIM insurance coverage. The Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) requires insurance carriers to offer stacked benefits to every policyholder who buys insurance. If the policyholder decides not to take advantage of the stacked benefits, the insurer must obtain a written waiver of those benefits.

Example of Stacked Benefits

If you insure two cars for $20,000 each, you are eligible for stacking benefits that allow you to claim up to $40,000 on each vehicle. The MVFRL requires the insurer to offer this option to every insured. If the insured declines, the insurer must obtain an express written waiver of the option to purchase stacked benefits.

Court Case: Barnard v Travelers

According to the Pennsylvania Eastern District Court in Barnard v Travelers, No. 17-00290, whenever an insured chooses to increase the amount of coverage under their UIM policy, the insurance carrier must obtain a new written waiver of stacked benefits as required by the MVFRL.

Background of the Case

Michelle Barnard, the Plaintiff, held a UIM policy with The Travelers Home and Marine Insurance Company, the Defendant, since 2007. When she initially secured the policy, she had UIM coverage limits of $50,000 for each of her two vehicles 6. At the time of purchasing the initial insurance coverage, she signed a written waiver of stacked benefits under that policy, waiving her right to stack UIM benefits under her policy. With that, the maximum amount of UIM benefits she could claim under her policy was $50,000.

In May 2009, Ms. Barnard increased her third-party liability coverage limits under the policy from $50,000 to $100,000 on each insured vehicle. This meant she would have been entitled to claim up to $200,000 on each car, as per her allowable stacked benefits. Notably, Ms. Barnard did not sign any written waiver of her stacked benefits upon this increase in coverage.

When Ms. Barnard was injured in a car accident on June 17, 2016, she submitted a UIM claim under her policy with Travelers Insurance. Travelers tendered $100,000 in UIM benefits to Ms. Barnard, assuming she had waived her option to stack her UIM benefits in 2007. Ms. Barnard rejected this tender and sued Travelers, claiming she was entitled to more than was tendered.

Increase in UIM Limit is a “Purchase”

Travelers argued before the Eastern District Court that it had no duty to obtain a new waiver of stacked benefits under the policy, even after Ms. Barnard increased her liability insurance coverage limits in 2009. Travelers claimed the initial 2007 waiver was still in operation and effective, despite the increased coverage purchased by Ms. Barnard in 2009.

The federal district court rejected Travelers’ argument. Judge Gerald McHugh held that the language of the MVFRL requires a renewed waiver of stacked benefits when liability coverage limits are increased or purchased. According to Judge McHugh, because an increase in coverage under an existing policy requires an insured to pay a higher premium, an increase in coverage limits qualifies as a “purchase” as defined by the MVFRL. As a result, the court ruled that Travelers should have obtained a new waiver of UIM stacked benefits in 2009 when Ms. Barnard increased her liability insurance limits. Pursuant to the district court’s ruling, Travelers was responsible for paying Ms. Barnard up to $200,000 in UIM benefits under her policy.

Contact Zwick Law

For questions relating to the MVFRL and Pennsylvania auto insurance coverages, please contact Matthew R. Zwick, partner of Zwick Law, at (814) 371-6400 or by e-mail, to schedule a legal consultation. At Zwick Law, we’re always here for you

*The use of the Internet, Facebook and/or any other form of social media communication with the firm or any individual member of the firm does not establish an attorney-client relationship.  Time-sensitive information should be directed immediately to the office of Zwick Law at (814) 371-6400.

LEVEL THE PLAYING FIELD – TACTICS USED TO REDUCE OR DENY PERSONAL INJURY CLAIMS

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After the occurrence of an accident, which results in personal injuries to you or a loved one, it is not unusual for a claims adjuster from a liability insurance carrier to contact you to express sympathy and offer assistance in a time of need.  While the adjuster’s friendliness and solicitude may seem legitimate, the insurance adjuster’s primary function is to save his employer (i.e., the liability insurance company) money by reducing or greatly diminishing the settlement of your claim.  The tricks and tactics that insurance adjusters use to reduce or deny claims have affected hundreds of people throughout the years—which is why it is very important that all accident victims learn to recognize some of the most commonly utilized methods employed by insurance carriers and claims adjusters.

Becoming fully aware of commonly known tricks and tactics may help you or your loved ones avoid making an error that could prove extremely damaging to a personal injury claim.

Take it Slow – Don’t Rush into a Personal Injury Settlement

In many instances, accident victims require numerous doctor visits, medical and psychological treatment and extended time off of work before the scope and extent of their injuries are fully recognized and appreciated.  As the scope and extent of medical care and treatment increase, so does the potential settlement value of your case.  The first trick that many claims adjusters may utilize to reduce the payout on your case, is to rush the settlement process in order to close your claim before you receive all of the medical care that you need and deserve.

Ensure that You Receive Full Compensation – Don’t Accept Deliberate Underpayments

A claims adjuster also may intentionally send you less insurance money than your injuries and necessary treatment warrant.  In the overwhelming majority of cases, receiving and accepting payment from a liability insurance company means that you intend to enter a full and final settlement of your claims.  In other words, payment from an insurance company for injuries caused by its insured, often times represents full and complete payment on your injury claim.  After you have deposited or cashed the check, you will not be able to request additional compensation in the future—even if you later discover the amount you received is not enough to cover your medical bills and other accident-related expenses.

Take it Slow, But Not too Slow – When is the Right Time to Settle?

Many claims adjusters know that being out of work, while simultaneously accumulating medical debt, can be very stressful and intimidating.  Adjusters often develop various methods to stall the claims process, knowing—or at least hoping—that the longer the process takes, the more likely you are to accept a lesser amount of money to settle your claim.  In other cases, an adjuster also may hope that stalling or delaying a claim will cause an injured party to overlook a statute of limitation deadline, which could have the legal effect of barring a monetary recovery on your injury claim forever.

Level the Playing Field – Contact Zwick Law

Almost all insurance companies and adjusters want injured parties to avoid consulting with an experienced personal injury attorney—an attorney who will recognize their deceiving tricks and tactics.  The primary objective of a claims adjuster is to settle claims as inexpensively as possible, or even deny the claim in its entirety.  Throughout the settlement process, many adjusters will discourage you from consulting with an attorney, all while providing you with hope that they will work with you to settle the situation fairly (and, untimely, at a value much lower than you deserve).

If you or someone close to you is involved in an accident, the best thing to do is to contact a personal injury attorney immediately.  An experienced attorney, who is dedicated to being your advocate, will ensure that your claim is handled professionally, fully and fairly throughout the entire process – from injury to absolute compensation.  At Zwick Law, our experienced team takes pride in representing our clients diligently and aggressively through every stage of a claim.

With offices conveniently located in DuBois, Pennsylvania, we are standing by to provide you with the peace of mind you deserve.  For questions concerning a personal injury claim, contact Matthew R. Zwick at (814) 371-6400 or mrz@zwick-law.com, to schedule a free legal consultation and case analysis.  At Zwick Law, we’re always here for you.[1]

**The use of the Internet, Facebook and/or any other form of social media communication with the firm or any individual member of the firm does not establish an attorney-client relationship.  Time-sensitive information should be directed immediately to the office of Zwick Law at (814) 371-6400.