Last year, Glen Shikunov of McCormick & Priore, P.C. successfully litigated an appeal on a matter of first impression in the Superior Court in Erie Ins. Exch. v. Backmeier, 287 A.3d 931 (Pa. Super. 2022) wherein the Court rejected an attempt by a Plaintiff to invalidate a “coordination of benefits” provision typically employed in UM/UIM Insurance Policies to “cap” the total recovery across multiple household policies at the single highest limit available amongst those policies.
In Backmeier, the claimant was fatally injured while operating a bicycle and made a claim for UIM benefits under two household policies. Both policies provided $100,000 in UIM benefits, unstacked, and insured a single motor vehicle. Both policies further contained a “coordination of benefits” provision that capped the claimant’s total recovery across all second priority household policies to the single highest limit available across any single policy, which was $100,000. After the $100,000 was tendered on a pro rata basis from the two policies, the claimant challenged the validity of the “coordination of benefits” provision as contrary to the MVFRL by creating “gap coverage” as opposed to the required “excess coverage” recognized in Pennsylvania.
The Superior Court upheld the “coordination of benefits” provision as a necessary tool to implement the claimant’s choice to reject “stacking” and receive reduced premiums as a result, finding that “[t]o hold otherwise would permit a policyholder to waive stacking to receive a reduced premium and then permit stacking or aggregation of second priority UIM coverage. Thus, under the circumstances of the case sub judice, a limit of protection clause that caps second priority UIM coverage to the highest limit of liability of any single motor vehicle insured under any one second priority UIM coverage policy merely implements the concept of waiver of stacking and does not create gap coverage in contravention of the MVFRL.”
The Backmeier decision was initially appealed to the Pennsylvania Supreme Court. On August 14, 2023, the Pennsylvania Supreme Court denied review thereby solidifying the Superior Court’s published decision in Backmeier as the “law of the land” and enforcing similar UM/UIM “coordination of benefits” provisions in insurance policies in Pennsylvania.
The Backmeier decision can be found here.
For additional questions, please contact Glen Shikunov, Esq. and/or Scott Tredwell, Esq.
This article was prepared by McCormick & Priore, P.C. to provide information on recent legal developments of interest to our readers. This publication is in no way intended to provide legal advice or to create an attorney-client relationship. All Rights Reserved. This article may not be reprinted without the express written permission of McCormick & Priore, P.C.