The Idaho Supreme Court in Gearhart v. Mutual of Enumclaw Ins. Co., 160 Idaho 666, 378 P.3d 454 (Idaho 2016), found that a UIM anti-stacking provision was ambiguous and, therefore, unenforceable. In Gearhart, the Court considered a UIM policy's anti-stacking clause which stated that the maximum limit of liability under all of the policies that were issued was the highest applicable limit under any one policy. However, the Court found this clause to be ambiguous and, therefore, did not preclude a passenger from recovering the total cumulative UIM benefits under each policy issued to the insured's parents. The majority opinion concluded that the anti-stacking clause in question was ambiguous because it could be construed to "mean that one aggregates all of the applicable policy limits and then the total of the limits constitutes the highest limit of any one policy." The dissent characterized the majority's conclusion as "nonsensical." The dissent would have found the anti-stacking clause to be neither ambiguous nor complex.
New York Law requires insurance companies to allocate continuous, progressive losses on a pro rata basis among all triggered policies based upon a time-on-the-risk allocation model. The New York Appellate Court recently rejected an invitation to create an unavailability exception to the allocation rule so that insurers were not required to indemnify the insured for periods when liability insurance was unavailable in the marketplace.
Who pays for the orphan? The Federal District Court in New York recently held that when an insurance company becomes insolvent the insured becomes responsible for the orphan's share created by the insolvency under a pro rata method of allocation involving successive insurers indemnity obligations for asbestos claims involving progressive injuries. See Liberty Mut. Ins. Co. v. The Fairbanks Company, 2016 WL 1169511 (S.D.N.Y. March 22, 2016).