Under Pennsylvania law, MVFRL §1739(c), insurance companies are required to offer insureds the option to waive stacked UIM coverage at the time of purchase. The Pennsylvania Supreme Court held recently that under Pennsylvania’s Motor Vehicle Financial Responsibility Law, when the insured increases UIM coverage, that constitutes a statutory “purchase” which thereby voids any prior stacking waivers. Because of this, the purchase of increased UIM coverage then requires insurance companies to offer their insureds a renewed opportunity to waive the stacking. Failure to provide that renewed option of waiver entitled the insured to stack the UIM benefits.
In Barnard v. Travelers Home and Marine Insurance Co., 216 A.2d 1045 (Pa. 2019), the insured argued that her increase in UIM policy limits was the equivalent of a purchase within the meaning of the Financial Responsibility Act. The trial court agreed and granted summary judgment in favor of the insured. The issue was certified by the U.S. Third Circuit to the Pennsylvania Supreme Court, which the Supreme Court was asked the following: “If an insured under a policy of insurance subject to the [MVFRL] has waived stacking, but later secures an increase in the limit of her UIM coverage on her existing policy, must her insurance carrier obtain a separate waiver of her right to stack the coverage or does a prior waiver of the right to stack the coverage remain in effect?” The Pennsylvania Supreme Court responded in the affirmative. Under prior decisions in Pennsylvania, whenever an insured replaced vehicles covered under an insurance policy without changing the policy limits, that exchange did not constitute a purchase. However, in Barnard, the Court, relying upon Black’s Law Dictionary, found that the increase in limits was a purchase.