Per Vehicle Charge for Underinsured Motorist Coverage Does Not Allow Stacking

Facts of Case

Aaron Clampitt was injured in a car accident. The other driver’s insurer paid him $25,000. Because that amount did not cover Clampitt’s damages, he made  claim for underinsured motorist (“UIM”) coverage. Clampitt’s insurer, Geico, had issued Clampitt a policy covering three vehicles. Geico paid Clampitt $50,000, the policy’s per person limit for UIM coverage. Clampitt and Geico then litigated whether the UIM coverage could be “stacked” (i.e, whether the $50,000 limit could be multiplied, or stacked, by the number of insured vehicles). In this case, stacking would provide total UIM coverage of $150,000 (3 cars x the $50,000 limit).

The Geico policy contained the following terms and provisions: “regardless of the number of insured autos involved in the accident . . . vehicles or premiums shown in the declarations or premiums paid;” the per person limit of liability in the declaration “is the limit of our liability for all damages . . . sustained by one person as the result of one accident;” and “when coverage is afforded to two or more autos, the limits of liability shall apply separately to each auto as stated in the declarations but shall not exceed the highest limits of liability applicable to one auto.” Clampitt conceded this language prohibited stacking based upon prior court rulings.

However, the declarations page of the policies specifically stated that there was a separate charge for UIM coverage on each of the three vehicles and set forth the amount of that charge. Clampitt argued that this created an ambiguity. In other words, the separate “per vehicle” charge for UIM coverage promises three UIM coverages.

Ruling

The Geico policy is not ambiguous and the UIM coverage can not be stacked. First, a declarations page does not create coverage. Because it does not create coverage, a declarations page can not be used to create an ambiguity in an insurance policy. Second, the declarations page was silent on the issue of stacking. It did not state one way or the other whether stacking was allowed. The failure to expressly prohibit stacking does not create an ambiguity or mean that stacking is allowed.

The opinion can be found here.