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Trial Court voids Household Exclusion
On August 23, 2007 Judge Horgos from Allegheny County in GEICO v. Ayers denied GEICO's Motion for Summary Judgment and granted Ayers Motion for Summary Judgment which under the facts of the case set aside the household exclusion. This case involved a motorcyclist injured by an underinsured vehicle. He had 2 separate policies with GEICO, one insuring 2 motorcycles and another insuring 2 pick-up trucks. Both policies provided for stacking and were insured under 2 separate policies because of GEICO's underwriting policies which required them to be separated. GEICO knew about the existence of the motorcycles and pick-up trucks.
He made UIM claims on both of the motorcycle policies and then sought coverage on the personal policies. GECIO denied the claim on the personal vehicles due to the household exclusion relying upon the Superior Court decision in Alderson v. Nationwide and Supreme Court decision in Prudential v. Colbert. Ayers argued that by applying the exclusion it would be denying his right to inter-policy stacking under Section 1738(a) for which a premium was also paid. The Court relies upon the Supreme Court of Pennsylvania decision in Craley where the Court noted that as a way to obtain cost containment the legislature allowed one to reject interpolicy stacking. Thus, the legislature was employing the use of free choice.
The trial court writes, "to deny the insured the coverage for which he chose to pay certainly does not promote the legislative goals of the MVFRL. The Court in Craley asserted the right to all insureds to knowingly and voluntarily waive stacking. Here, GEICO seeks to have this Court declare that GEICO can unilaterally deny stacked coverage paid for by the insured by inserting exclusionary language elsewhere in the policy. The insured would have no reason to expect or anticipate an exclusionary clause regarding a coverage for which he or she consciously chose to pay." The court holds that "the insured is entitled to the underinsured motorist benefits sought herein under the facts and circumstances of this case."
Scott B. Cooper
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