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Insurance – Policy Coverage – UM/UIM – Stacking

A minor who suffered a skull fracture and permanent hearing loss from an auto accident cannot stack UM/UIM coverage from his parents’ auto liability policy on two family vehicles, and a Charlottesville U.S. District Court grants summary judgment to defendant insurance carrier.

Two prominent Supreme Court of Virginia opinions on the intra-policy stacking of UM/UIM coverage are relevant to this dispute, Goodville Mut. Cas. Co. v. Borror, 221 Va. 967, 970 (1981), and Va. Farm Bureau Mut. Ins. Co. v. Williams, 278 Va. 75 (2009). The intra-policy stacking of UM/UIM coverage is permitted unless clear and unambiguous language exists on the face of the policy to prevent such multiple coverage. Williams established that the mere presence of an anti-stacking provision in a policy limiting liability does not per se forbid stacking. The anti-stacking provision must be read in the context of the entire policy to determine whether stacking is clearly and unambiguously disallowed. In Williams, it was the existence of two different “each person” premiums listed in the declarations page that created the ambiguity in the policy upon which the Supreme Court of Virginia based its decision to allow stacking. Courts interpreting Williams are in agreement that the different “each person” premiums was the source of the ambiguity.

The Policy at issue in the instant action contains anti-stacking language that is materially identical to the language employed in the policy in Borror. Despite this language, plaintiff argues that there are three grounds for finding that the Policy does not clearly and unambiguously prevent stacking. First, plaintiff asserts that the anti-stacking provision in the limits of liability section of the Policy only prevents stacking of uninsured motorist coverage, not underinsured motorist coverage, because it expressly only refers to “Uninsured Motorists Coverage.” For example, the “Limit of Liability” section states, “[t]he limit of Bodily Injury Liability shown in the Declarations for each person for Uninsured Motorist Coverage is our maximum limit of liability for all damages . . . .” See Policy, Part 3 (emphasis added). In other sections of the Policy, points out plaintiff, a distinction is made between an “underinsured motor vehicle” and an “uninsured motor vehicle.” The Policy does not include any statement that a reference to uninsured motorist coverage is also to be treated as a reference to underinsured motorist coverage. Given the above facts, plaintiff argues it is ambiguous whether the stacking of underinsured coverage is prohibited.

Two courts have held that nearly identical anti-stacking provisions referring only to “Uninsured Motorists Coverage” clearly and unambiguously barred stacking of underinsured motorist limits. See Lloyd, 2010 U.S. Dist. LEXIS 73940, at *1; Davis, 2010 Va. Cir. LEXIS 105, at *2. It does not appear, however, that this precise argument was raised in those cases. Nonetheless, I conclude that the Policy clearly forbids the stacking of underinsured motorist coverage. Construing the Policy as a whole and the disputed term in its proper context, any reasonable person would understand the reference to “Uninsured Motorists Coverage” in the “Limit of Liability” section to include both uninsured and underinsured coverage.

Summary judgment for defendant insurance carrier.

Trigo v. Travelers Commercial Ins. Co. (Moon, J.) (Published) No. 3:10-cv-00028, Dec. 17, 2010; USDC at Charlottesville, Va. VLW 010-3-655, 12 pp.

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