Under Pennsylvania’s Motor Vehicle Financial Responsibility Law (“MVFRL”), an insurer must provide uninsured (“UM”) and underinsured (“UIM”) motorist coverage equal to the bodily injury liability limits under an automobile insurance policy.<span> </span>However, like most laws and regulations, there is an exception to the rule:<span> </span>an insurer is <em>not </em>required to provide such coverage where an insured submits a written request for lower limits.<span> </span>Recently, the U.S. District Court for the Eastern District of Pennsylvania analyzed whether a named insured changes the UM/UIM coverage limits for insured vehicles when, on a subsequent form adding another vehicle to the policy, he or she fails to affirmatively indicate an intention to “sign down” coverage for the originally insured vehicles. <span> </span>
In <a href="https://www.wcmlaw.com/wp-content/uploads/2019/04/Limandri20v.20Allstate20ins.20Co.pdf">Limandri v. Allstate Ins. Co</a>, the Court examined the unique factual circumstances surrounding the named insureds’ procurement of coverage to determine whether a second automobile coverage form superseded the named insureds’ initial designation for lower UM/UIM coverage limits.<span> </span>In 2001, the named insureds obtained automobile insurance coverage with Allstate for four vehicles.<span> </span>Simultaneously, the named insureds executed a form requesting lower UM/UIM coverage.<span> </span><span> </span>Soon thereafter, the insureds decided to add another vehicle to the policy, and signed another form (“2003 Form”) that “unequivocally requested lower UM/UIM limits for this new vehicle.”<span> </span>The form also listed the other vehicles covered by the policy; however, the parents did <em>not </em>check any boxes on the 2003 Form indicating they sought lower UM/UIM limits for the vehicles.<span> </span>
The coverage dispute arose when the named insureds’ daughter sustained bodily injury while driving a covered vehicle.<span> </span>When Allstate notified the daughter that she was only entitled to the reduced coverage limit per the 2001 Form, the daughter commenced the instant action against Allstate seeking, <em>inter alia</em>, UIM coverage equal to the bodily injury liability limits.<span> </span>Essentially, she argued her parents did not check any boxes for lower UM/UIM coverage in the 2003 Forms.<span> </span>The daughter also argued: (1) the lower UM/UIM limits did not apply based on the plain language of the 2003 Form; (2) the 2003 Form was ambiguous; and (3) the bi-annual renewals and payments of lower premiums were irrelevant to the Court’s coverage determination.<span> </span>
In applying Pennsylvania case law, the Court weighed the language contained at the top of the 2001 and 2003 forms, which included Pennsylvania’s MFVFRL requirement – if a named insured does not select lower UM/UIM limits, the limits set equaled the policy’s bodily injury liability limits – against the purpose of the 2003 Form to affirmatively provide information related to the new vehicle the named insureds sought to insure.<span> </span>In doing so, the Court reasoned that because the named insureds’ selection in 2001 for the initial three vehicles applied “to all future renewals” and the named insureds made no attempt to actively procure higher UM/UIM coverage for those vehicles, the named insureds “unequivocally signed-down” the UM/UIM coverage limits when they executed the 2001 Form.<span> </span>Moreover, the Court determined that the named insureds’ decision to leave the check boxes blank on the 2003 Form was not affirmative evidence of their choice to increase UM/UIM coverage limits since the named insureds provided no evidence to support that this was their intention.<span> </span>
In sum, this ruling illuminates the weight given to the plain language of an insurance policy and how, in the context of UM/UIM coverage disputes, affirmative steps are needed to alter coverage limits. Thanks to Lauren Berenbaum for her contribution to this post. Please email <a href="mailto:Bgibbons@wcmlaw.com">Brian Gibbons</a> with any questions.