Growing Trend: Increased Scrutiny of Auto Policy Exclusions


Exclusions in vehicle policies in Pennsylvania have recently been through enhanced scrutiny by the courts. At the forefront of this re-analysis is the family exclusion. That exclusion bars restoration of uninsured (UM) and underinsured (UIM) motorist rewards in which the claimant sustained personal injury while running a house vehicle insured on other coverage, generally the personalized auto/motorcycle scenario. Soon after decades of getting enforced by the courts, the domestic exclusion was found to be violative of the Pennsylvania Motor Motor vehicle Fiscal Accountability Regulation, 75 Pa.C.S.A. Segment 1701 et seq. (MVFRL) by the Supreme Courtroom in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019). The factual predicate of the keeping in Gallagher was the availability of inter-policy stacking below the coverage from which gains were being sought. So, less than policies supplying stacked protection, the residence exclusion is unenforceable.

In Donovan v. State Farm, 256 A.3d 1145 (2021) the Supreme Courtroom expanded the scope of Gallagher. In Donovan, UIM benefits were being sought less than a policy which delivered unstacked coverage. The Supreme Court, nevertheless, invalidated the exclusion, keeping that the waiver of stacking mandated by the MVFRL waived only intra-coverage stacking, leaving inter-plan stacking intact. As a result, the family exclusion was found to be unenforceable in unstacked insurance policies, way too, but only for procedures with many autos. A issue remained as the validity of the exclusion exactly where the host motor vehicle has no UM or UIM protection. In Erie v. Mione, 253 A.3d 754 (Pa. Tremendous. 2021) and Erie v. Sutherland, 2021 WL 2827321 (Pa. Tremendous. 2021), the Exceptional Court docket determined the house exclusion was however valid in that predicament. The Supreme Courtroom, even so, has agreed to overview the situation in Mione. So, the exclusion may perhaps be located to be unenforceable in this condition, too. Worries are not confined to the family exclusion.

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