Exclusions in auto policies in Pennsylvania have recently undergone increased scrutiny by the courts. At the forefront of this re-evaluation is the household exclusion. That exclusion bars recovery of uninsured (UM) and underinsured (UIM) motorist benefits where the claimant sustained injury while operating a household vehicle insured on other policy, typically the personal auto/motorcycle situation. After decades of being enforced by the courts, the household exclusion was found to be violative of the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. Section 1701 et seq. (MVFRL) by the Supreme Court in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019). The factual predicate of the holding in Gallagher was the availability of inter-policy stacking under the policy from which benefits were sought. Thus, under policies providing stacked coverage, the household exclusion is unenforceable.

In Donovan v. State Farm, 256 A.3d 1145 (2021) the Supreme Court expanded the scope of Gallagher. In Donovan, UIM benefits were sought under a policy which provided unstacked coverage. The Supreme Court, nonetheless, invalidated the exclusion, holding that the waiver of stacking mandated by the MVFRL waived only intra-policy stacking, leaving inter-policy stacking intact. Thus, the household exclusion was found to be unenforceable in unstacked policies, too, but only for policies with multiple vehicles. A question remained as the validity of the exclusion where the host vehicle has no UM or UIM coverage. In Erie v. Mione, 253 A.3d 754 (Pa. Super. 2021) and Erie v. Sutherland, 2021 WL 2827321 (Pa. Super. 2021), the Superior Court determined the household exclusion was still valid in that situation. The Supreme Court, however, has agreed to review the issue in Mione. Thus, the exclusion may be found to be unenforceable in this situation, too. Challenges are not limited to the household exclusion.

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