In a recent decision in Geist v. State Farm Mut. Auto. Ins. Co., No. 21-3315, 2022 WL 4543231 (Sept. 29, 2022), the Third Circuit Court of Appeals considered the question of whether an insurer that previously secured a written request for lower uninsured/underinsured motorist benefits (“UM/UIM”) on an auto insurance policy must secure subsequent requests for lower limits pursuant to 75 Pa.C.S. § 1734 each time an insured adds a new vehicle to the policy.

In Geist, the Plaintiff was injured while a passenger in a vehicle and made a claim for UIM benefits under a household policy issued to her parents. That policy provided $100,000/$300,000 in liability coverage but only $50,000/$100,000 in UIM coverage consistent with an election for lower limits by Plaintiff’s mother executed at the time the policy was procured. The insurer tendered the limits available on the face of the policy. The Plaintiff, however, argued that the insured’s election of UIM limits in an amount lower than the liability limits on the policy is void per 75 Pa.C.S. § 1734 where, according to the Plaintiff, the statute requires a new written election each time a new vehicle is added to a given policy.

The Third Circuit declined to interpret the requirements of 75 Pa.C.S. § 1734 in this manner. Turning to the statutory language, the Third Circuit explained that consistent with the Pennsylvania Supreme Court’s decision in Blood v. Old Guard Ins. Co., 934 A.2d 1218 (Pa. 2007), obligations under 75 Pa.C.S. § 1734 are measured at inception of the policy. That is, “Once an insurer receives a signed election from the insured that includes an express designation of the amount of coverage requested, it may issue that policy with the insured’s requested limit. The insurer need not do any more to fulfill its obligations under [the MVFRL] during the life of that policy.” Geist at *3.

The Third Circuit declined Plaintiff’s invitation to extend the reasoning in Barnard v. Travelers Home & Marine Insurance Co., 216 A.3d 1045 (Pa. 2019) to trigger subsequent requirements for lower limit elections pursuant to 75 Pa.C.S. § 1734 with each new “purchase” of insurance, whether by adding a vehicle or otherwise, on an auto insurance policy. The Geist Court explained that Barnard interpreted the statutory requirements of 75 Pa.C.S. § 1738, which requires new “stacking waivers” to be procured each time a “purchase” of insurance is made. Noting that no such language or “purchase” requirements exist within the plain reading of 75 Pa.C.S. § 1734, the Third Circuit refused to read them into the statute and distinguished Barnard, accordingly.

The Court ultimately upheld the lower limits election on the subject policy and limited Plaintiff’s recovery to the stated $50,000 in limits. The Third Circuit further rejected certification to the Pennsylvania Supreme Court explaining that it found no need for certification where the language of the statute is clear.

The Geist decision can be found here.

For additional questions, please contact Glen Shikunov, Esq. and/or Scott Tredwell, Esq.

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