Insurance – ‘Stacking’ Coverage – UM/UIM – Passenger Injury

By Deborah Elkins
Published: June 15, 2009

A girl injured while a passenger in an underinsured vehicle can “stack” the UM/UIM coverage for bodily injury on three separate vehicles listed in the policy carried by her parent, as the Virginia Supreme Court distinguishes the anti-stacking language in a 1981 stacking case, Goodville Mut. Cas. Co. v. Borror, from the anti-stacking language in the policy here.

The injured girl, by her father as next friend, filed a dec action, asserting that she was entitled to UM/UIM coverage in the total amount of $850,000. The circuit court determined the total UM/UIM coverage afforded plaintiff under the policy was $550,000.

The carrier argues on appeal that although Virginia law permits “intrapolicy stacking” of UM/UIM coverage, the policy at issue expressly prohibits such stacking. The carrier relies on our decision in Goodville Mut. Cas. Co v. Borror, 221 Va. 967 (1981), in which we held that unambiguous language in the policy at issue prohibited the stacking of UM/UIM coverage for two vehicles listed in the policy.

The injured girl asserts the circuit court should have stacked the UM/UIM coverage in the amount of $850,000, rather than $550,000. Appellant contends the provisions of the policy before us are materially different from the policy provisions at issue in Goodville. She contends that in the policy considered in Goodville, the unambiguous language prohibiting intrapolicy stacking was found entirely in the UM/UIM coverage provision section that also included a schedule listing available coverage of $25,000 for each person, and of $50,000 for each accident. Appellant observes that, in contrast, the policy at issue in this case does not provide limits for each person and each accident in a designated schedule stated within the UM/UIM section of the policy.

In resolving the present policy dispute, we compare the policy provisions before us with those we reviewed in Goodville. The policy in Goodville stated the limits of liability were bodily injury of $25,000 each person; $50,000 each accident, and property damages $5,000 each accident. The policy also stated under “Limits of Liability”: Regardless of the number of motor vehicles to which this insurance applies, a) the limit of liability for bodily injury stated in the schedule as applicable to “each person” is the limit of the company’s liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting “each person,” the limit of the liability stated in the schedule as applicable to “each accident” is the total limit of the company’s liability for all damages because of bodily injury sustained by two or more person as the result of any one accident.

The policy in Goodville included separate premiums for the two vehicles listed in that policy. Nevertheless, we held that the policy language in Goodville unambiguously prohibited stacking and limited the plaintiff’s coverage to $25,000. We stated that the phrase “regardless of the number of … motor vehicles to which this insurance applies” was a clear and unambiguous provision prohibiting stacking.

Although the policy that is the subject of the present appeal contains this same phrase, that similarity must be considered in the context of the other policy language. In reviewing the balance of the other policy language, we observe that the present policy contains a significant difference from the policy we considered in Goodville. There, the UM endorsement contained a schedule stating the limits of liability for “each person” at $25,000. This statement was clearly and unambiguously set forth at the beginning of the UM endorsement, and no other portions of the policy addressed this same subject.

Unlike the policy in Goodville, the present policy does not state the limits of liability for “each person” in a schedule within the UM/UIM endorsement. Instead, the UM/UIM endorsement refers the reader to the “declarations” page of the policy, in which there are three references to the term “each person.” Two of those references state a limit of liability for “each person” in the amount of $300,000, while the third reference states a limit of liability for “each person” in the amount of $250,000.

These different sets of coverage, when considered along with the “anti-stacking” language of the UM/UIM endorsement, leave unresolved the question whether all three separate limits for “each person” apply and, if not, which of the single separate limits for “each person” is applicable. This disparity in the stated limits of liability for “each person” manifests an ambiguity regarding the extent of total coverage for “each person” under the policy.

Because we must construe this ambiguity in the insured’s favor, we hold that she is entitled to “stack” the UM/UIM coverage for all three vehicles listed in the policy. We hold the circuit court erred in failing to declare that the insured is entitled to total UM/UIM coverage in the amount of $850,000 under the policy.

We affirm that part of the circuit court judgment holding the insured was afforded UM/UIM coverage under the policy, and reverse the part of the judgment limiting the UM/UIM coverage to $550,000, and enter final judgment for UM/UIM coverage of $850,000.

Affirmed in part, reversed in part and final judgment.

Virginia Farm Bureau Mut. Ins. Co. v. Williams (Keenan, J.) No. 081900, June 4, 2009; Norfolk Cir.Ct. (Morrison) Harley M. Duane III, Justin S. Gravatt for appellant; John G. Crandley, O.L. Gilbert for appellees. VLW 009-6-074, 11 pp.

Virginia Lawyers Weekly

Insurance – ‘Stacking’ Coverage – UM/UIM – Passenger Injury

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