The Pennsylvania Supreme Court’s January decision in Gallagher v. Geico, 201 A.3d 131, struck down a household exclusion which exists in many insurers uninsured and underinsured motorist policies. Though the decision did so in the context of stacked underinsured motorist coverage, since the decision was announced the policyholder’s bar has attempted to extend its rationale to both nonstacking policies and, separately, to the family car exclusion—another mainstay of uninsured and underinsured motorist coverage. Indeed, Judge Gerald McHugh recently applied Gallagher to a nonstacked underinsured motorist policy in Donovan v. State Farm, Civil Action No. 17-03940 (June 28, 2019), and Judge Steven Tolliver recently applied Gallagher to the family car exclusion in Schmitt v. State Farm, Civil Action No. 18-06583 (Mont. Co. CCP, May 23, 2019).
We address here the purpose of the two exclusions and how Gallagher may affect them. The typical “household exclusion” precludes an insured from recovering uninsured or underinsured motorist benefits under a policy if the vehicle the insured is occupying at the time of the accident is owned by her but not insured on the policy under which the claim is being made. It can serve several purposes but there are two principal ones.
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