The U.S. Court of Appeals for the Eighth Circuit, affirming a Missouri district court's decision, has ruled that stacking of underinsured motorist ("UIM") benefits was specifically barred by language in an automobile insurance policy.
The Case
After she was injured in a car accident, Renae Strain sought UIM benefits from her family's insurer, Safeco Insurance Company, because the limits of the other driver's policy were too low to fully cover her injuries.
Safeco paid Ms. Strain the policy maximum of $100,000, but she asserted that she was entitled to three times that amount because her family had three cars insured under the policy.
The U.S. District Court for the Western District of Missouri determined that the policy prohibited this sort of "stacking," and Ms. Strain appealed to the Eighth Circuit.
The Eighth Circuit's Decision
The Eighth Circuit affirmed.
In its decision, the circuit court explained that the policy set a "maximum limit" of $100,000 "for all damages . . . arising out of bodily injury sustained by any one person in any one accident." The Eighth Circuit added that the policy also stated that, even if more than one vehicle was insured under the policy, the limits applicable to UIM coverage "may not be stacked."
According to the Eighth Circuit, no other provision in the policy overcame this "express prohibition on stacking."
The circuit court rejected Ms. Strain's contention that she was entitled to stack coverage as a result of the policy provision that stated that, "[a]ny underinsured motorist insurance we provide with respect to a vehicle [the insured does] not own shall be excess over any collectible underinsured motorist insurance providing coverage on a primary basis." The circuit court acknowledged that the Supreme Court of Missouri, in Ritchie v. Allied Property and Casualty Ins. Co., 307 S.W.3d 132 (Mo. 2009), held that this type of language, on its own, could create ambiguity on whether coverage could be stacked.
The Eighth Circuit reasoned, however, that unlike the insurance policy in Ritchie, Ms. Strain's policy "immediately" clarified this statement by stating that "the maximum limit of [Safeco's] liability shall not exceed the highest limit applicable to any one auto," which in this case was $100,000.
In the circuit court's opinion, this clarification, along with the provision expressly forbidding stacking, "eliminate[d] any ambiguity."
The case is Strain v. Safeco Ins. Co., No. 18-1587 (8th Cir. Sep. 3, 2019).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].