To stack or not to stack, that is the question

No extra insurance for fatal school bus accident.

Watch the video at https://rumble.com/v2ygzys-to-stack-or-not-to-stack-that-is-the-question.html and at https://youtu.be/B9yDDMQjj6M

The plaintiffs, Mark and Karen Kuhn (the Kuhns) sued to seek a declaratory judgment on the available liability insurance covering an accident between a semi truck owned by Jason Farrell and a school bus driven by Mark.

IN Mark Kuhn and Karen Kuhn v. Owners Insurance Company; et al, no. 4-22-0827, 2023 IL App (4th) 220827, Court of Appeals of Illinois, Fourth District (June 28, 2023) the semi truck was insured under a policy issued by Owners Insurance Company (Owners), and that policy also insured six other vehicles – two other semi trucks and four trailers – that were not involved in the accident. Each vehicle had a limit of $1 million per accident. The Kuhns sought a declaration that the coverage limits for all the covered vehicles would be aggregated, or “stacked,” resulting in a total available liability insurance of $7 million for the accident.

The trial court entered a written judgment in favor of the Kuhns, concluding that (1) the policy was ambiguous; (2) because the ambiguity is to be construed against owners, stacking of the policy’s coverage limits is permitted; and (3) the aggregate limit of insurance for liability coverage under the policy was $7 million. Accordingly, the court granted Kuhn’s motion for summary judgment and entered judgment against Owner. The owners appealed

BACKGROUND

“Stacking” usually means combining or aggregating the policy limits that apply to more than one vehicle where the other vehicles are not involved in the accident.

The rationale behind not allowing stacking of liability coverage – that liability insurance insures specific cars – runs counter to the plaintiff’s position. Because the insurance is linked to a certain car.

The Illinois Supreme Court recently declined to consider adopting one itself rule barring stacking of auto liability coverage by statute because the antistacking provision in that case was unambiguous and enforceable as written.[[[[Hess v. Estate of Klamm2020 IL 124649, ¶ 30, 161 NE3d 183.’

The current insurance

The policy provided “Combined Liability” coverage for each of the seven vehicles up to “$1 million per accident.” The Kuhns argued that the wording of the policy and accompanying declarations were ambiguous under Illinois case law because the coverages and premiums set forth in the declarations were repeated for each insured vehicle.

The owners argued that the policy declarations were consistent with each other and not ambiguous. The owners argued that the policy contained an unambiguous anti-stacking provision that cleared away any ambiguous ambiguities in the declarations and should be enforced as written. Especially in subsection 5. expressly stated that the limits of the same or similar coverage applicable to other vehicles could not be added to determine the extent of coverage for an accident.

ANALYSIS

In general, provisions on stacking in insurance do not conflict with public policy. In Illinois, an unambiguous anti-stacking clause will be given effect by a trial court.

In this case, the “limit of insurance” provisions refer to the declarations to define the insurance limits, and the declaration pages state seven separate times that the “combined liability” limit for each vehicle is $1 million for each accident.

Reading the policy in its entirety and interpreting its plain language, the court concluded that the declarations are consistent, not ambiguous, and the anti-stacking clause set forth in the policy clarifies any ambiguities.

Coverage varied depending on the vehicle insured; for example, the premiums for Vehicle 1 and Vehicle 2 (both semi-trucks) were identical for liability, UIM/UM coverage, and medical payments, but only Vehicle 1 had comprehensive and collision coverage.

The anti-stacking clause

Although some ambiguity existed, the policy’s anti-stacking clause cleared up any possible confusion.

The policy’s explicit antistack clause is unambiguous and should be applied as written.

Instead of applying the policy’s clear anti-stacking provision, the court engaged in precisely the kind of tortured and strained reading of the policy to find ambiguity that this court and the Illinois Supreme Court have repeatedly rejected. This being a mistake, the trial court’s decision was reversed and the case remanded with directions to grant summary judgment in favor of the owners.

It should be axiomatic that a trial court should never engage in a tortured or strained reading of a policy to find an ambiguity that did not exist regardless of the needs of the accident victims and their families. Clear and unambiguous policy wording refusing to allow stacking of policies covering more than one insured vehicle when only one vehicle is involved in an accident should be enforced as written. The Illinois Court of Appeals read the entire policy and found no ambiguity and insisted on enforcing the policy as written.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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