U.S. Court of Appeals for the Third Circuit Affirms Precedential Decision

We prevailed in the U.S. Court of Appeals for the Third Circuit in a precedential decision upholding application of a household vehicle exclusion. A fifteen-year-old was seriously injured while riding an uninsured dirt bike on private property. After recovering the bodily injury limit of the tortfeasor’s policy, he also recovered UIM benefits under the two household policies. However, the other household policy underwritten by the same carrier contained a household vehicle exclusion, which excluded UIM benefits under the facts of the accident, so coverage was denied. The carrier then filed a declaratory judgment action in the Eastern District Court of Pennsylvania, but lost because the District Court concluded that the household vehicle exclusion acted as an impermissible de facto waiver of stacking as a result of the carrier paying UIM benefits under the other household policy. On appeal, a unanimous panel of the Third Circuit vacated the District Court’s Order, holding in a precedential opinion that the household vehicle exclusion was valid and enforceable because the dirt bike involved in the underlying accident was uninsured.