The state Supreme Court has affirmed the validity of an auto insurance policy’s household exclusion clause barring the recovery of UM/UIM benefits in a claim involving a vehicle owned by the insured but covered by a different policy issued by another company.
Considering an appeal of a declaratory judgment action by Erie Insurance Co. by the estate of Eugene Baker, the court found Erie’s household exclusion barring Baker’s recovery of stacked uninsured/underinsured motorist benefits under an Erie policy following a crash involving a motorcycle covered by another company’s policy limited the scope of scenarios in which UM/UIM benefits were available. As such, the household exclusion clause did not act as a “disguised waiver” in violation of Section 1738 of the Motor Vehicle Financial Responsibility Law.
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