In Nationwide Mut. Ins. Co. v. Zerr, No. 10-4199 (E.D. Pa. July 26, 2011) the District Court addressed the issue of whether a new rejection of stacking form is required when an insured who initially rejected underinsured (UIM) motorist coverage on a single vehicle policy, then rejects UIM coverage altogether, then re-instates UIM coverage on the single vehicle policy.
Zerr purchased a single car policy in 1993 and rejected UIM stacking. In 1999 she dropped UIM coverage altogether and signed a rejection of UIM form. A week later, she modified the policy to cover a different vehicle and added UIM coverage back. Five (5) years later she was involved in an accident and sought UIM stacked coverage. The District Court holds that Zerr’s decision to add UIM insurance in 1999 was a "purchase" (or essentially a re-purchase of UIM coverage) under Section 1738 of the Motor Vehicle Financial Responsibility Law (MVFRL) and a new rejection of stacking form was required. Since no form was signed in 1999 then stacking applies for this accident.
There is also a separate issue on the amount of credit a UIM carrier can take for the third parry policy limits. The Court notes that the credit is based upon total available coverage and not based upon whether a disputed portion of a claim was paid.
For a copy of the opinion feel free to contact Scott Cooper at SchmdtKramer PC below.
Schmidt Kramer PC
209 State Street
Harrisburg, PA 17101
(717) 232-6300 – Telephone
(717) 232-6467 – Facsimile