Catherine D. Munster, Esq.
Frank P. Bush, Jr., Esq.
Tiffany R. Durst, Esq. Bush & Bush
McNeer, Highland, McMunn & Varner, L.C. Elkins, West Virginia
Clarksburg, WV Attorney for The Estate of
Attorneys for Appellant State Farm Mutual Anthony Adkins
Automobile Insurance Company
The Opinion of the Court was delivered PER CURIAM.
CHIEF JUSTICE McGRAW dissents and reserves the right to file a dissenting opinion.
JUSTICE STARCHER dissents and reserves the right to file a dissenting opinion.
1. Insurers may incorporate such terms, conditions and exclusions in an
automobile insurance policy as may be consistent with the premium charged, so long as any
such exclusions do not conflict with the spirit and intent of the uninsured and underinsured
motorists statutes. Syllabus Point 3, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989)
2. West Virginia Code § 33-6-31 (1992) does not forbid the inclusion and application of an anti-stacking provision in an automobile insurance policy where a single insurance policy is issued by a single insurer and contains an underinsured endorsement even though the policy covers two or more vehicles. Under the terms of such a policy, the insured is not entitled to stack the coverages of the multiple vehicles and may only recover up to the policy limits set forth in the single policy endorsement. Syllabus Point 5, Russell v. State Automobile Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803 (1992).
In this appeal from the Circuit Court of Summers County, we are asked to
determine the enforceability of an exclusion prohibiting the stacking of underinsured
motorist coverage in two separate insurance policies issued by an insurance company upon
two vehicles. The circuit court concluded that because the insurance company issued two
separate policies to the policyholders, such an exclusion could not be enforced and the
underinsured motorist coverage in each policy could be stacked.
As set forth below, we reverse the circuit court's ruling. We hold that because the policyholders received a multi-car premium discount on both policies as consideration for the anti-stacking exclusion, the coverage cannot be stacked.
State Farm further argued that the appellees had received a multi-car discount for insuring both cars through State Farm, and that the discount -- which was noted on the declarations page of both policies -- served as consideration for enforcing the exclusion.
To resolve this dispute, State Farm intervened in the underlying circuit court action and initiated a declaratory judgment action against the appellees to resolve the amount of underinsured motorist coverage available to the appellees through the two policies. The appellees subsequently filed a motion for summary judgment asking the circuit court to declare that they could stack the coverage available under the two policies, for a total of $40,000.00 in coverage.
In an order dated December 7, 1999, the circuit court granted a declaratory judgment to the appellees. The circuit court concluded that State Farm had issued two separate policies to the appellees, and that anti-stacking language is void when a policyholder is covered by two or more underinsured motorist policy endorsements. The circuit court therefore allowed the appellees to stack their two policies together.
State Farm now appeals the circuit court's order.
Insurers may incorporate such terms, conditions and exclusions
in an automobile insurance policy as may be consistent with the
premium charged, so long as any such exclusions do not conflict
with the spirit and intent of the uninsured and underinsured
Relying upon this authorization, insurance companies began including exclusions in automobile insurance policies to prevent the stacking of underinsured motorist coverages on multiple vehicles.
We considered the effect of an anti-stacking exclusion on underinsured motorist coverage contained in a policy covering multiple cars in Russell v. State Automobile Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803 (1992). In Russell, the exclusion was contained within a single insurance policy that covered two separate vehicles.
As in the instant case, the policy in Russell provided underinsured motorist coverage for both vehicles of $20,000.00 per person, and the premium for the coverage reflected a multi-car discount for underinsured motorist coverage. The policy also contained anti-stacking language that limited the policy's underinsured motorist coverage to the highest limit applicable for any one vehicle covered by the policy.
This Court examined the anti-stacking exclusion and ruled that, when a multi- car discount has been given to a policyholder, the underinsured motorist coverage in a policy cannot be stacked. The Court stated, in Syllabus Point 5 of Russell:
West Virginia Code § 33-6-31 (1992) does not forbid the inclusion and application of an anti-stacking provision in an automobile insurance policy where a single insurance policy is issued by a single insurer and contains an underinsured endorsement even though the policy covers two or more vehicles. Under the terms of such a policy, the insured is not entitled to stack the coverages of the multiple vehicles and may only recover up to the policy limits set forth in the single policy endorsement.
The Court concluded that because the policyholder had received the benefit of their bargain -- a multi-car discount -- that the policyholder was not entitled to stack multiple insurance coverages in light of a clear exclusion prohibiting stacking.
In the instant case, State Farm argues that, like in Russell, the appellee- policyholders received the benefit of their bargain -- a multi-car discount -- and that clear anti-stacking language contained in both State Farm policies should be enforced to prevent the stacking of the underinsured motorist coverages.
The appellees, however, argue that Russell applies only to instances where the policyholder buys one insurance policy that covers multiple vehicles, and receives a multi-car discount. The appellees point out that, in the instant case, State Farm sold the policyholders two separate policies for their two vehicles. The policies have different policy numbers and different renewal dates. However, the declarations pages for both policies have a notation that a multi-car discount has been given and that the discount applies to underinsured motorist coverage. Still, the appellees argue that Russell is inapplicable.
State Farm counters that in 1995, the Legislature revised the underinsured motorist insurance statutes to expand the application of Russell. State Farm argues that the statute stretched the application of Russell from a single insurance company selling a single policy that covers multiple vehicles, to situations such as the instant case where a single insurance company sells multiple policies to the same policyholders covering different vehicles. W.Va. Code, 33-6-31(b) now states, in part, with the 1995 amendment:
Regardless of whether motor vehicle coverage is offered and provided to an insured through a multiple vehicle insurance policy or contract, or in separate single vehicle insurance policies or contracts, no insurer or insurance company providing a bargained for discount for multiple motor vehicles with respect to underinsured motor vehicle coverage shall be treated differently from any other insurer or insurance company utilizing a single insurance policy or contract for multiple covered vehicles for purposes of determining the total amount of coverage available to an insured.
State Farm argues that even though its underinsured motorist coverage was provided to the appellees in two separate single vehicle insurance policies, it provided the appellees with a discount for multiple motor vehicles, and therefore argues it is entitled, under W.Va. Code, 33-6-31(b), to be treated no differently than an insurance company utilizing a single insurance policy to cover multiple vehicles. We agree.
Accordingly, we hold that the anti-stacking exclusion contained in the State Farm policies is enforceable in the underinsured motorist insurance policies purchased by the appellees. Applying the clear language of the State Farm policy, the appellees are entitled to recover the limits of the policy with the highest limit of liability -- that is, $20,000.00. We therefore find that the circuit court erred in its holding that the appellees were entitled to stack the coverages available under their two insurance policies.