Just before COVID-19 captured and took hostage society’s collective attention, the Pennsylvania Supreme Court’s decision in Gallagher v. Geico Indemnity, 201 A.3d 131 (Pa. 2019) turned a year old. At its most basic level, the Gallagher decision held that the household exclusion contained in Geico’s UIM policy was unenforceable because it impermissibly denied stacked UIM coverage to Geico’s insured.

The insured in Gallagher was injured in an accident while riding his motorcycle. The motorcycle was insured on a policy issued by Geico that included UIM coverage. The insured also had a separate auto policy with stacked UIM coverage, which was also issued by Geico. When the insured made a claim for UIM benefits, Geico paid the UIM limits on the motorcycle policy, but denied coverage on the auto policy, citing the household exclusion. The Pennsylvania Supreme Court held that, in those circumstances, the household exclusion operated as a “de facto waiver of stacked coverage,” which was not permitted by the MVFRL. Therefore, Geico’s household exclusion was unenforceable.