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Pennsylvania Insurance Claim Lawyers New Opinion Clarifies Rules For Stacking Umuim Coverage

On July 21, 2010 the Superior Court issued an opinion in the matter of Sackett v. Nationwide Insurance Company. This opinion comes on the heels of two prior Supreme Court opinions in the same case and the opinions have come to be known as Sackett I, II & III.

The Sackett saga began with Nationwide’s refusal to pay its own seriously injured insured the benefits it owed its insured under a longstanding auto policy.

Mr. Sackett was the owner of a multi-car policy with Nationwide. When he first purchased the policy, he executed a valid “waiver” of the stacking option that would apply to Pennsylvania UM/UIM benefits. Stacking is an option on Pennsylvania car insurance policies that allows people to inexpensively increase their coverage. It is an option that we strongly encourage people to use (see, e.g., the chapter on buying insurance in our book “The Ultimate Guide to Pennsylvania Car Accident Cases: A Roadmap to Justice “)

Because stacking underinsured or uninsured motorist benefits is such an important option, the legislature created rules by which people had to be clearly advised of the option and had to clearly and in writing “waive” the option before insurance companies would be permitted to deny people the benefits of a stacked option.

Mr. Sackett had executed such a waiver when he first bought his policy. But the rules require that he be given a new opportunity to consider the option whenever he adds a new vehicle to his policy. And so when Mr. Sackett purchased a new vehicle and added it to his Nationwide policy, Nationwide was required to get a new waiver. Nationwide failed to get a new waiver.

When Mr. Sackett was seriously injured in a car accident, Nationwide advised him that he did not have the benefit of stacking, even though he had three cars on the policy and even though Nationwide had not obtained a new waiver following the addition of a new vehicle. Fortunately for Mr. Sackett, his Pennsylvania insurance claim lawyers recognized the flaw in Nationwide’s position. They initiated the lawsuit to compel Nationwide to live by the terms of its contract.

Nationwide resisted, first claiming that the initial waiver was valid despite their failure to obtain a new waiver as required by the rules. In Sackett I, the Supreme Court ruled that Nationwide had to live by the rules and that Mr. Sackett was entitled to stacked coverage because they had not obtained a new waiver when Mr. Sackett added a new car to the policy.

Nationwide continued to resist, then arguing that Mr. Sackett didn’t really add a new vehicle he just allowed another vehicle to be added pursuant to an “after acquired vehicle” clause in the policy. In Sackett II, the Supreme Court acknowledged that an “after acquired vehicle” clause might offer Nationwide an escape if it were true that Mr. Sackett had really added his vehicle to the policy through such a clause and not via separate endorsement. The Court decided that it would be up to the trial court to determine whether Nationwide’s claim was factually accurate.

The trial court determined that Nationwide’s claim was not true or accurate. The trial court determined that the “after acquired vehicle” clause was not implicated in Mr. Sackett’s case for various reasons. Still, Nationwide was not willing to pay the benefits it promised under its contract. Thus, Sackett III, the most recent appeal to the Superior Court.

In Sackett III, the Pennsylvania Superior Court found that the trial court was correct, that Nationwide’s position was not factually or legally sound and that Mr. Sackett is entitled to stacked UM/UIM coverage.

Nationwide has requested reargument and so it seems that Nationwide is still not ready to pay Mr. Sackett the benefits it owes him.

So, the Erie insurance claim lawyers at Purchase, George & Murphey, P.C. will closely follow the continuing Sackett saga and report on it here as more develops.

I think it’s fair to infer that Mr. Sackett has not found Nationwide to be on his side, as they stridently proclaim to the public. In fact, Mr. Sackett has learned what so many other Pennsylvania injured people learn: insurance companies are friendly enough when collecting premiums but the relationship often turns hostile when the time comes to pay on a claim.

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Allison, July 8, 2017