In Blood v. Old Guard, the Pennsylvania Supreme Court had to determine whether an auto insurance carrier must obtain a new UM/UIM “sign down” form from an insured each time the insured modifies the amount of his liability coverage. When presented with this same issue, the Pennsylvania Superior Court determined that the insurance company did have to obtain a new UM/UIM “sign down” form whenever the insured modified his liability coverage. In the absence of a new UM/UIM “sign down” form, the Superior Court held the amount of UM/UIM coverage available to the insured was equal to the amount of his modified liability limits. The Pennsylvania Supreme Court reversed the ruling of the Pennsylvania Superior Court, holding that an auto insurance carrier is not required to have the insured execute a new UM/UIM “sign down” form whenever the insured desires to change his liability limits under an existing policy.
In Blood, the insureds purchased an auto policy from Old Guard in 1986 with $500,000 in liabiilty coverage. At the time they purchased the coverage, the insureds elected reduced UM/UIM coverage in the amount of $35,000 (albeit with the stacking option). In June of 2000, the insureds decided to lower their liability limits from $500,000 to $300,000. To this end, they executed a “coverage selection form” indicating their desire for $300,000 in liability coverage. Although the “coverage selection form” included a choice to select an amount of UM/UIM coverage, the insured indicated no selections for UM/UIM.
The insured was injured in a motor vehicle accident in August of 2000. The insured asserted that his UIM coverage amounted to $900,000 ($300,000 stacked on three vehicles). The insured’s position was that his UIM coverage should equal the amount of his liability coverage because Old Guard did not obtain a new UM/UIM “sign down” form from his when he reduced his liability coverage to $300,000 in June of 2000. The Supreme Court rejected the insured’s position based on the plain language of 75 Pa.C.S.A. 1731 and 75 Pa.C.S.A. 1734. The Court held that these statutory provisions did not require Old Guard to re-comply with the mandates of these provisions regarding reduction in UM/UIM coverage each time an insured changed the amount of his liability coverage under an existing policy. In this regard, the Supreme Court stated:
“[T]he MVFRL does not provide any support for Appellee’s position that the [insureds’] change of liability coverage had an effect on the otherwise valid Section 1734 reduction. Appellee would have us import into our reading of the language of the relevant portions of the MVFRL his argument that the change here is a delivery or issuance of a policy. This Court is without authority to write new requirements into the MVFRL where the statutory language is without ambiguity.”
If you have any questions regarding your auto insurance policy, including the amount of your UM/UIM coverage, call DLP to schedule a free consultation.
John P. Finnerty, Esquire