In a recent decision in Golik v. Erie Ins. Exch., 2023 PA Super 150 (Aug. 7, 2023)(approved for publication, no citation yet available), the Superior Court of Pennsylvania considered as a matter of first impression the question of whether a first named insured’s uninsured motorist benefits (“UM”) “stacking” rejection on an auto insurance policy binds other named insureds on that policy.
In Golik, the claimant was injured in a motor vehicle accident and made a claim for UM benefits under a policy in which she was a named insured. The policy provided unstacked UM benefits consistent with a UM stacking waiver executed her the claimant’s husband as the first named insured on the policy. The claimant urged that the waiver executed by the first named insured did not adequately inform her, as the second named insured on the policy, of her rights to reject stacking. She further argued that 75 Pa.C.S. § 1738 of the Pennsylvania Motor Vehicle Financial Responsibility Laws requires that each named insured on the policy be provided with their own opportunity to reject stacked UM benefits, which she did execute.
The trial court agreed, opining that 75 Pa.C.S. § 1738(c) suggests that “each” named insured on a given policy be provided with an opportunity to reject stacking. Conceding that the remainder of the statute only allows the first named insured to reject stacking via waiver, the trial court nevertheless found that insurers are obligated to take affirmative additional steps to ensure that others named on the policy are aware of the stacking rejection made by the first named insured and, absent such steps, the first named insured’s waiver is not applicable to other named insureds.
The Superior Court reversed, citing to analogous cases in the context of other UM/UIM elections pursuant to 75 Pa.C.S. § 1731 and 75 Pa.C.S. § 1734 and finding that Pennsylvania courts have long held that third parties, drivers, and named insureds are bound by the decisions of the first named insured. The Court opined that the stacking rejection was knowingly executed by the first named insured, and both the claimant and her husband enjoyed reduced premiums for nearly two decades without an affirmative request to change the policy to provide stacking. Those facts, combined with persuasive authority from prior Supreme Court and federal decisions led the Superior Court to find that a stacking waiver executed by the first named insured provides “constructive notice” of the election to all other insureds on the policy. Further, the Superior Court rejected arguments of ambiguity within 75 Pa.C.S. § 1738. The Court explained that the requirement to provide “each” named insured purchasing an insurance policy with the right to reject stacking spoke only to the actual purchasers of the policy I.e. the first named insureds applying for insurance. The Superior Court thus reversed the trial court and remanded the case for a judgment in the insurer’s favor.
The Golik decision can be found here.
For additional questions, please contact Glen Shikunov, Esq. and/or Scott Tredwell, Esq.
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