Written by Attorneys Robert M. Runyon and Jeannie Park
Note: This article is an interpretation of current law and is offered for informational purposes only.
This material is not legal advice and should not be construed or used as a substitute for the advice of an attorney.
In a previous e-alert, we reported on the Superior Court's decision in Blood v. Old Guard Ins. Co., 2006 Pa. Super. 44 (2006). In Blood, the insured obtained a motor vehicle policy that provided $500,000 in liability coverage, but pursuant to a valid sign-down, elected to reduce his UM/UIM coverage limits to $35,000. After several years, the insured informed the carrier that he wished to decrease his liability coverage limit to $300,000. The carrier did not require the insured to execute a separate UM/UIM reduction form. The Superior Court held that an insurer must obtain new UM/UIM reduction forms every time a new liability coverage limit was selected by the insured.1 In the absence of a new reduction form, the UM/UIM coverage would automatically be converted to equal the new liability limit.
In an opinion issued on November 20, 2007, the Pennsylvania Supreme Court reversed the Superior Court's finding.2 The court first noted that the applicable Motor Vehicle Financial Responsibility Law ("MVFRL") provisions requiring the availability of UM/UIM benefits and the insured's option to request lower limits were unambiguous. These provisions, specifically §§ 1734 and 1791, impose requirements upon the insurer at the time of the initial issuance of a policy. They do not, however, require an insurer to re-comply with the requirements every time that an insured alters its coverage.
In holding that the MVFRL does not support the position that an insured's subsequent change of liability coverage has any effect on the validity of a preexisting UM/UIM reduction, the Pennsylvania Supreme Court refused to elevate form over substance where the record indicated that the insured received the amounts of coverage requested. Furthermore, the court noted that it did not have the authority to rewrite the requirements of the MVFRL where the statutory language is clear and unambiguous. As such, a valid sign-down or waiver of UM/UIM benefits will remain viable even when other coverage limits are subsequently amended by the insured.
1 This article can be accessed at http://www.nldhlaw.com/CM/Articles/Articles339.asp.
2 This opinion has not yet been published but is available at http://www.courts.state.pa.us/OpPosting/Supreme/out/J-70-2007mo.pdf.
