Major v. Cruz, --- A.3d ---, 2024 WL 562021 (Pa. Super. Ct. Feb. 13, 2024)
The household vehicle exclusion has once again been proven to be viable and enforceable—under the right circumstances. Major was using her mother’s vehicle when she was struck by another vehicle operated by Cruz. Major thereafter filed suit against Cruz and State Farm, which had issued a policy insuring Major’s mother’s vehicle and a separate policy insuring a vehicle owned by Major. Cruz’s liability insurer tendered its limits of $15,000. Major’s mother had waived stacking on the UIM policy that applied to the vehicle Major was operating at the time of the accident. As first named insured, Major’s mother had also rejected stacking on the separate State Farm policy insuring Major’s vehicle. State Farm had paid Major the UIM benefits applicable to the vehicle she was operating and under the policy issued to her mother, but denied payment of UIM benefits under the policy insuring Major’s own vehicle as a result of the household vehicle exclusion.
Although the trial court had addressed whether the Coordination of Benefits provisions in the State Farm policies applied and had not addressed the validity and application of the household exclusion, the Superior Court noted that, unlike the Supreme Court’s opinion in Donovan (holding that a Coordination of Benefits provision did not apply as the stacking waiver was invalid in that case), Major had waived her challenge to the stacking waivers applicable to the State Farm policies. Thus, the Superior Court was required to evaluate whether the household vehicle exclusion was effective and precluded additional payment from State Farm.
Noting that there were valid stacking waivers as to each State Farm policy, the Superior Court determined that the rationale of Donovan and Gallagher does not apply. As such, the household vehicle exclusion was a valid preclusion of UIM benefits and Major was not owed any benefits under the policy insuring her own vehicle. Since the only UIM coverage available to Major was the policy insuring the vehicle she was operating—her mother’s vehicle—the Coordination of Benefits provision had no effect.
The Superior Court, thus, once again has proven that, unlike how many have characterized Gallagher and its progeny as entirely nullifying the household vehicle exclusion, that exclusion remains valid and enforceable under the appropriate circumstances. As the Superior Court observed, its ultimate goal is to ensure that insureds receive the coverage that they paid for and that insurers provide the coverage they had contractually agreed to provide.
