In Pennsylvania, uninsured motorist (UM) and underinsured motorist (UIM) coverages must be offered with the issuance of all motor vehicle liability insurance policies. These coverages may be rejected in accordance with the strictures of §1731(c.1) of the Motor Vehicle Financial Responsibility Law. If not rejected, UM and UIM coverages must be stacked unless stacking is rejected pursuant to §1738 of the MVFRL. Stacking is the cumulation of coverages in order to create a greater pool of benefits for recovery. The manner and method of stacking under motor vehicle policies continues to perplex practitioners and the courts in Pennsylvania.
Prior to 1990, stacking was developed through case law. All policies provided stacked coverage. Stacking was limited, however, to a specific class of claimants. Essentially, Class One insureds (the named insured and resident relatives) were entitled to stack UM and UIM coverages; Class Two insureds (people deriving their claim by reason of occupancy of an insured vehicle) were not entitled to stack. The Act 6 amendments to the MVFRL, effective July 1, 1990, codified stacking for the first time. Under the MVFRL, policyholders were given the option to reject stacking of UM and UIM coverages. A specific form, to be signed by the first named insured, is required in order to reject stacking. Although not included in the amendments, the class distinction was retained by the courts in assessing eligibility to stack.
