The PA Supreme Court in a January 23, 2019 opinion om Gallagher v. GEICO addressed the enforceability of the automobile policy “household vehicle exclusion”. GEICO issued two household auto policies. One covered three autos owned by Gallagher and had stacking. The other was a motorcycle policy that also had stacking. Gallagher was on his motorcycle at the time of his accident. He recovered the liability coverage from the tortfeasor. He also collected the UIM coverage under the motorcycle policy. He then attempted to collect UIM from the household policy covering the three autos, which had a household vehicle exclusion. GEICO denied UIM benefits under the auto policy based on the exclusion. The Superior Court upheld it reluctantly and essentially advocated review by the Supreme Court.
The Supreme Court held the household vehicle exclusion unenforceable under the facts of this case. The Court noted at page 11 of the majority opinion: “The policy provision, buried in an amendment, is inconsistent with the unambiguous requirements of Section 1738 of the MVFRL under the facts of this case inasmuch as it acts as a de facto waiver of stacked UIM coverage provided for in the MVFRL, despite the undisputable reality that Gallagher did not sign the statutorily-prescribed UIM coverage waiver form. Instead Gallagher decided to purchase stacked UM/UIM coverage under both of his policies, and he paid GEICO premiums commensurate with that decision. He simply never chose to waive formally stacking as is plainly required by the MVFRL.”
Justice Wecht dissented stating at page 1-2 of his opinion:“The Majority’s analysis conflates the rejection of stacking (which requires a written waiver) with the exclusion of certain acts or occurrences from the defined scope of coverage itself (which requires no waiver). Contrary to the Majority’s conclusion, nothing in the text of the MVFRL prohibits household vehicle exclusions.”