The Pennsylvania Supreme Court has agreed to hear arguments dealing the interplay between household vehicle exclusions limiting insurance stacking and the state's Motor Vehicle Financial Responsibility Law. The case at issue should give the justices a chance to revisit a topic the high court has split on twice in the past 10 years.
On Aug. 8, the justices granted allocatur in Gallagher v. GEICO Indemnity to address whether it is a violation of the MVFRL if a household vehicle exclusion limits stacking even when the insured paid for and did not expressly waive the option to stack the policy.
According to the state Superior Court's January decision in Gallagher, in two split decisions the Supreme Court affirmed rulings that had determined similar policy language limiting stacking did not violate the MVFRL. One of those cases, Government Employees Insurance v. Ayers, came before the justices in 2011, while the other case, Erie Insurance Exchange v. Baker, came before the Supreme Court in 2009.
In Gallagher, according to Superior Court Judge H. Geoffrey Moulton, who wrote the intermediate court's decision in the case, plaintiff Brian Gallagher bought stacked coverage on two Geico insurance policies one for his motorcycle and the other for his two automobiles.
He was involved in a motorcycle accident in August 2012, and, after paying $50,000 in underinsured motorist coverage, Geico denied Gallagher's claim for additional coverage under the automobile policy. Geico cited the household vehicle exclusion in that policy, which said the coverage did "not apply to bodily injury while occupying or from being struck by a vehicle owned or leased by you or a relative that is not insured for {UIM] coverage under the policy."
The trial court granted summary judgment to Geico, finding that Ayers was controlling, Moulton said.
Ayers, according to Moulton, involved Jesse Ayers who insured two motorcycles with Geico under one policy and two trucks under another policy, which contained a similar household vehicle exclusion. Ayers was also injured in a motorcycle accident, and denied coverage beyond the UIM limit on his motorcycle insurance because of that exclusion.
Moulton said a divided Superior Court ruled that the language in the exclusion was clear and unambiguous, and did not go against the MVFRL "or any other discernable public policy."
On appeal, the Supreme Court split evenly on the issue. Chief Justice Thomas G. Saylor wrote an opinion supporting an affirmance, saying he disapproved of the policy, but that "the writing of separate policies, and enforcement of the household exclusion, is justified relative to motorcycle insurance coverage."