SOUTH CAROLINA SUPREME COURT RULES IN FAVOR OF STACKING UNDERINSURED COVERAGE DESPITE POLICY EXCLUSION 

CARTER V. STANDARD FIRE INSURANCE CO., Opinion No. 27340.

Filed, December 11, 2013,

The South Carolina Supreme Court upheld an Appellate Court ruling in favor of Plaintiff Michael Carter, where Mr. Carter was seeking relief from summary judgment in a case involving the stacking of UIM coverage from his parent’s existing insurance policy. The Defendants, Standard Fire Insurance, claimed Carter was ineligible to stack coverage because the policy explicitly excluded coverage.  There was no dispute as to whether Mr. Carter was a Class I insured.

This case stems from a violent car accident, which resulted in the death of the driver and paralysis of the passenger Michael Carter, who also owned the vehicle operated by the driver. The driver’s estate settled a wrongful death claim against Allstate, and Allstate settled with Carter for the sum of the two UIM policies Carter carried on the vehicle.  Suit was filed after Standard Fire Insurance refused to allow Carter to “stack” coverage from his parents existing policies in which he was a Class I insured.

Under South Carolina law, all Class I insured’s – those named in the policy, their spouses and resident relatives – are entitled to stack coverage from multiple UIM policies until all damages are satisfied. UIM coverage is “personal and portable” under the law, which means that it follows the insured rather than the vehicle.  The amount an insured is permitted to stack is limited to the amount of UIM carried on the particular vehicle involved in the incident, or the “measuring vehicle.”  (That is to say, an insured with $50,000.00 of UIM coverage may reach out to other insurance policies, where she is a class one insured, but she may only recover up to $50,000.00, the amount of coverage on the measuring vehicle.)

Under the facts of this case, the Defendant insurer included an exclusionary clause in the insurance policy which purported to limit stacking for injuries sustained “While ‘occupying’” another vehicle owned by the insured or a family member, and not insured under the policy.  In essence, the Insurer was attempting to limit the “portability” of UIM coverage, and in doing so limit one’s ability to stack UIM coverage if she is involved in an accident in a car not covered by the actual policy in dispute.  As the court pointed out, doing so would be in conflict to existing state law governing underinsured insurance.  For this reason, the court found the exclusion void, and held in favor of the Plaintiff.

Please feel free to contact us should you have any questions regarding insurance or portability of UIM coverage in South Carolina.

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