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You only get what you pay for – no UIM protection No benefits



Lloyd, Janet and Eric Colebank (together, appellant) appealed against the decision of 22 September 2021 adopted in Fayette County Court of Common Pleas, and granted the claim for judgment on the basis of the Erie Insurance Exchange (Erie) in this declaratory judgment. action. At the heart of the appellants’ argument is that the court erred in relying on the insurance rules of a separate insurance, issued by a separate insurance company, to determine whether Erie owed Erie. IN Erie Insurance Exchange v. Lloyd Colebank, Janet Colebank and Eric ColebankNo. 1244 WDA 2021, Superior Court of Pennsylvania (April 20, 2022), the trial court refused to allow itself to be examined for Eric’s serious injuries and found that the family exclusion and the denial of UIM coverage for his own vehicle gave up the right to UIM benefits.

FACTS

Lloyd and Janet are husband and wife, and Eric is their 27-year-old son, who lives with them in Fayette County. In February 2019, Eric drove his 2016 Jeep Wrangler SUV, which he owned, south on Brownsville Road, Jefferson Township, Fayette County, Pennsylvania. At the same time, the tortfeasor, Wilbert Brown, was driving his vehicle north on the same road when he lost control of his vehicle, crossed the center line and collided with Eric’s vehicle. As a result of the accident, Eric suffered several injuries, which required several operations.

Eric filed a personal injury claim against Brown, who was insured by Allstate Insurance under an insurance policy that provided $ 25,000.00 in personal injury liability. On Brown’s behalf, Allstate handed over the $ 25,000.00 liability limit to Eric. Eric, through his agent, informed Erie of the Allstate offer, and Erie waived the subrogation and agreed to the settlement with Allstate. The parties agree that the damages and injuries suffered by Eric as a result of the underlying accident exceeded the insurance limit of $ 25,000.

At the time of the accident, Eric’s Jeep was insured under an insurance policy issued to Eric by State Farm (State Farm Policy). Eric specifically rejected coverage for underinsured motorists (UIM) under his state farm policy.

Eric then filed a claim for UIM coverage with Erie under an insurance policy issued to Lloyd and Janet, which provided, including, UIM benefits under specifically defined circumstances (Erie policy). The Erie insurance insured two vehicles, neither involved in the accident in question nor owned by Eric. The Erie policy provides $ 100,000.00 UIM with stacking and two vehicles, for a total of $ 200,000.00 in UIM benefits. Erie collected premiums from Lloyd and Janet for UIM and stacked UIM benefits under their policy.

The Erie policy included an exclusion clause for households in its UIM approval.

Erie filed a motion for judgment on the pleadings, claiming that:

  • Eric was driving a vehicle owned by him and was insured under another car insurance (State Farm Policy) at the time of the underlying accident;
  • Eric deliberately and voluntarily refused UM / UIM coverage under State Farm Policy, which insured the jeep he was driving when the accident occurred; and therefore,
  • Erie was not obligated to provide UIM benefits to Eric under the Erie Policy issued to Lloyd and Janet in accordance with applicable Pennsylvania law and the Erie Policy Exclusion Provision.

Following the argument, the court adopted a decision granting Erie’s motion. The court ruled:

“[It] has applied the persuasive reasoning set forth in the Erie Insurance Exchange v. Sutherland, [1113 WDA 2020, 2021 WL 2827321 (Pa. Super. July 7, 2021) (unpub. memo),] and finds that Donovan v. State Farm [Mutual Automobile Insurance Company, 256 A.3d 1145 (Pa. 2021),] is distinguishable from the facts in this case because the insured did not waive or reject underinsured car benefits which [Eric] Colebank did this. “

ANALYSIS

The standard for reviewing a decision that upholds a judgment on the submissions requires that we decide whether the law, on the basis of the facts, makes recovery impossible. [Cagey v. Commonwealth, 179 A.3d 458, 463 (Pa. 2018)]. Eric claimed that Erie promised to pay UIM benefits to the named insured and their resident relatives if they were injured by an underinsured motorist up to the purchased UIM coverage.

Based on the nature of the appeal, the Court of Appeal found that it was necessary to explain the relevant legal history regarding UIM coverage and exclusion of households. A person who has voluntarily chosen not to wear underinsured motorist protection on his own vehicle is not entitled to recover underinsured motorist benefits from separate insurances issued to family members with whom he lives where a clear and unambiguous language explicitly excludes underinsured motorist protection. for bodily injury sustained while using a motor vehicle that is not insured for underinsured motor insurance.

After a detailed examination of the UM / UIM precedent, the Supreme Court found, contrary to the appellants’ arguments, two previous cases, as both cases are essentially similar to this case in terms of facts and procedural attitude. In all three cases, the insured suffered injuries while driving a vehicle or motorcycle and the individual had expressly refused UIM coverage on that host insurance. Similarly, the injured individual sought coverage from a separate policy that included stacked UIM coverage and a provision excluding households. Since Eric did not purchase UIM coverage for his own insurance, he did not have the required UIM coverage to stack his parents’ household insurance with UIM benefits.

For the above reasons, the appellants were not entitled to UIM benefits under their Erie policy in the case under judicial review. Consequently, we confirm the district court’s decision granting Erie’s claim for judgment on the pleadings.

ZALMA Opinion

Uninsured and underinsured drivers must be intentionally bought or rejected. In this case, Eric denied UM / UIM coverage on the vehicle involved in the accident. Because his injuries were greater than the insurance available to the tortfeasor, he sought UIM coverage from insurance policies issued to his parents’ vehicles not involved in the accident. The coverage was clearly and unequivocally excluded and the attempt to get an insurer to pay for damages that exceeded available insurance can not change the facts or the law.


(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

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