What Is Stacked Insurance In Pennsylvania?

Stacking allows drivers to combine the UM/UIM limits of various insurance policies in order to help injured victims obtain maximum damages compensation.

In 2019, the Pennsylvania Supreme Court held that household vehicle exclusions do not violate Pennsylvania’s Motor Vehicle Financial Responsibility Law (MVFRL).

Contact our Bethlehem car accident lawyers to gain more insight into how this ruling may impact you.

UM/UIM Coverage

Uninsured/Underinsured Motorist coverage (UM/UIM) is an essential element of an auto insurance policy, providing protection from drivers without insurance or those whose policies don’t cover your injuries. Many states permit “insurance stacking”, whereby multiple policies can combine their respective UM/UIM limits in order to increase protection.

While stacking can be advantageous to those who own multiple vehicles or share one with their spouse, it is crucial that they understand its workings before choosing their policy. Each state varies in regards to insurance stacking laws; policy rules can change overtime as well; additionally, any benefits of stacking may be offset by higher premiums.

Pennsylvania does not mandate UM/UIM coverage, however it is strongly encouraged that all drivers purchase some. The amount you can select typically ranges between $100,000 per person and $300,000.

Pennsylvania Supreme Court issued an important decision that impacts individuals and families who opt to stack UM/UIM coverage in their policies. In Gallagher v. Geico Indemnity Company, the court determined that an insurance provider cannot exclude this type of protection in one policy for either individuals or households.

This ruling stems from a Westmoreland County Court of Common Pleas decision which found that including “excluded” as part of rejection language violated Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL). The Pennsylvania Supreme Court then agreed and clarified that such exclusion is not permissible.

As a result of this ruling, some insurance companies have implemented policies requiring individuals and families to waive stacked UM/UIM coverage in all new policies and to discontinue it in existing ones. We strongly advise individuals or families to never opt-out of stacking coverage since its few dollars each month could mean greater potential compensation following an accident. Thomas Conrad & Conrad are knowledgeable regarding current legal precedent and can help maximize your stacked coverage to provide adequate compensation for injuries suffered in an accident.

PIP Coverage

Pennsylvania law mandates each policyholder carry at least $5,000 of PIP or medical payment coverage as part of a no-fault state’s no-fault requirement, covering immediate medical expenses related to an accident and covering lost wages and essential services if you cannot perform your normal duties after experiencing one. It can even cover funeral costs for deceased family members.

PIP coverage may be added onto other auto policies in your household and even to family members living together, although there are a few important considerations regarding such stacking arrangements. Before making this decision, consult a Philadelphia car accident lawyer before adding additional PIP coverage on top of existing policy limits.

Pennsylvania’s decision to allow UM/UIM stacking was an outstanding victory for injured motorists, yet purchasing only minimum limits will only increase your risk of incurring out-of-pocket expenses should an accident cause serious injuries.

Increasing PIP/FPB limits may also help avoid common consumer pitfalls such as overrelying on health insurance and not seeking higher limits. Furthermore, expanding your PIP/FPB limits allows for more comprehensive financial protection options like work loss coverage (covering lost income), essential services coverage such as house cleaning or child care as well as funeral expense protection.

Franks v. State Farm Mutual Automobile Insurance Company brought before the Pennsylvania Supreme Court recently and dealt with inter-policy UM/UIM stacking. The Court held that waivers of stacking must be in writing to be effective; additionally, removal of vehicles from multivehicle policies did not constitute “purchase” under 75 Pa C.S 1738 so did not necessitate new waivers of stacking.

Liability Coverage

Pennsylvania drivers have the option of increasing their minimum liability coverage with uninsured motorist (UM) and underinsured motorist (UIM) policies, providing extra financial security if an uninsured or underinsured driver causes an accident that results in medical bills or lost wages due to a crash with them. Multiple policies covering multiple vehicles within their household are permitted but only when their UM/UIM limits overlap.

While most states allow insurance stacking, each state’s laws governing it vary significantly. Florida and Pennsylvania allow policyholders to opt-out of stacking coverage in exchange for reduced premiums; Wisconsin caps stacking at three vehicles. Not all insurers offer stacking coverage; in fact, some include anti-stacking language in their policies to discourage customers from taking advantage of it.

As such, injured victims may not realize their right to stack UM/UIM coverage until it is too late. In 2023, however, Pennsylvania Supreme Court issued an order ruling against this practice; finding that exclusion of household vehicles from coverage violated section 1738 of Motor Vehicle Financial Responsibility Law.

Gallagher v. GEICO Indemnity Company was decided in court as evidence that when household members add another vehicle to their policy, that can be considered a purchase and therefore triggers the waiver of existing stacked UM/UIM coverage. On the other hand, removal from policy is not considered purchasing and thus does not lead to such waiver of coverage.

Although the upfront costs associated with stacking insurance may be slightly higher, its benefits far outweigh this increase. A serious accident can easily exceed two household policies’ combined uninsured/underinsured motorist limits by over $100,000 per person and $300,000. As a result, many people choose to stack their uninsured/underinsured motorist (UM/UIM) coverage so as to have adequate protection in the event of an accident. Our Pennsylvania auto accident lawyers are knowledgeable with relevant legislation and can ensure your rights are safeguarded fully; contact our office now so we can discuss all available options with you!

Uninsured Motorist Coverage

Uninsured/Underinsured Motorist (UM/UIM) coverage exists to fill in any gaps left when accident victims sustain injuries from drivers with no insurance or low policy limits, helping cover medical bills, lost earnings, property damage and pain and suffering damages. Most auto insurers offer it and you can stack multiple policies in 32 states which permit this.

Recently, the Pennsylvania Supreme Court issued a 5-2 decision ruling that individuals can stack their insurance to gain greater protection against uninsured drivers. They made this determination in Gallagher v. Geico Indemnity Company as household exclusions for Uninsured Motorist (UM/UIM) coverage are inconsistent with Motor Vehicle Financial Responsibility Law and violate an insured’s right to receive benefits under that statute.

PIP and liability policies, however, must only ever be combined on one policy at any given time; in comparison UM/UIM coverage can be added onto multiple policies to provide extra protection in case of an accident with an uninsured or underinsured driver. It is recommended to add this coverage on each vehicle owned by an insured for maximum coverage in an event of collision with such drivers.

Though not required in Pennsylvania, insurance companies must offer stacking as an option and give drivers the choice of waiving it in writing. Although stacking may not be mandatory, you should always carefully consider whether the extra costs could prove worthwhile in case of a serious car accident.

Leeson & Leeson offers experienced Bethlehem personal injury lawyers to assess your legal options and advise on the most beneficial courses of action for you and your family following car accidents. Our team has decades of experience representing injured victims and their families in car accident claims; they will fight tirelessly on your behalf for maximum compensation for losses sustained as a result of accidents.

Contact our office now and arrange a consultation session with a member of our team, in the event that an accident was caused by an uninsured or underinsured motorist, to gain more insight into your options following such an incident. We hope to see you soon!