Growing Trend: Increased Scrutiny of Auto Policy Exclusions

Exclusions in automobile policies in Pennsylvania have lately undergone amplified scrutiny by the courts. At the forefront of this re-analysis is the home exclusion. That exclusion bars recovery of uninsured (UM) and underinsured (UIM) motorist rewards in which the claimant sustained damage even though functioning a home vehicle insured on other policy, commonly the individual car/motorbike condition. Just after decades of being enforced by the courts, the home exclusion was identified to be violative of the Pennsylvania Motor Vehicle Fiscal Duty Legislation, 75 Pa.C.S.A. Part 1701 et seq. (MVFRL) by the Supreme Courtroom in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019). The factual predicate of the holding in Gallagher was the availability of inter-coverage stacking below the coverage from which added benefits were being sought. Therefore, below policies furnishing stacked coverage, the home exclusion is unenforceable.

In Donovan v. Point out Farm, 256 A.3d 1145 (2021) the Supreme Court expanded the scope of Gallagher. In Donovan, UIM gains have been sought under a coverage which supplied unstacked protection. The Supreme Court, nevertheless, invalidated the exclusion, keeping that the waiver of stacking mandated by the MVFRL waived only intra-coverage stacking, leaving inter-policy stacking intact. Thus, the domestic exclusion was identified to be unenforceable in unstacked guidelines, also, but only for guidelines with numerous automobiles. A concern remained as the validity of the exclusion the place the host vehicle has no UM or UIM coverage. In Erie v. Mione, 253 A.3d 754 (Pa. Tremendous. 2021) and Erie v. Sutherland, 2021 WL 2827321 (Pa. Tremendous. 2021), the Superior Courtroom determined the residence exclusion was nonetheless valid in that scenario. The Supreme Court docket, nevertheless, has agreed to evaluation the challenge in Mione. Thus, the exclusion may be located to be unenforceable in this condition, much too. Challenges are not minimal to the home exclusion.