To Stack or Not to Stack, That is the Question
Anti-Stacking Provision Clear & Unambiguous
Plaintiffs, Mark and Karen Kuhn (the Kuhns) sued seeking a declaratory judgment of the available liability insurance covering an accident between a semitruck owned by Jason Farrell and a school bus driven by Mark.
In Mark Kuhn and Karen Kuhn v. Owners Insurance Company; et al, No. 4-22-0827, 2023 IL App (4th) 220827, Court of Appeals of Illinois, Fourth District (June 28, 2023) the semitruck was insured under a policy issued by Owners Insurance Company (Owners), and that policy also insured six other vehicles-two other semitrucks and four trailers- that were not involved in the accident. Each vehicle had a limit of $1 million per accident. The Kuhns sought a declaration that the coverage limits for all of the covered vehicles should be aggregated, or "stacked," resulting in a total of available liability insurance of $7 million for the accident.
The trial court entered a written judgment in favor of the Kuhns, concluding that (1) the policy was ambiguous; (2) because the ambiguity should be construed against Owners, stacking of the policy's coverage limits was permitted; and (3) the aggregate limit of insurance for liability coverage under the policy was $7 million. Accordingly, the court granted the Kuhns' motion for summary judgment and entered judgment against Owners. Owners appealed
BACKGROUND
"Stacking” ordinarily involves combining or aggregating the policy limits applicable to more than one vehicle where the other vehicles are not involved in the accident.
The rationale behind not allowing stacking of liability coverage-that liability policies insure particular cars-is contrary to plaintiff's position. Because the insurance attaches to a particular car.
The Illinois Supreme Court recently declined to consider adopting a per se rule barring stacking of automobile liability coverage as a matter of law because the antistacking provision in that case was unambiguous and enforceable as written. [Hess v. Estate of Klamm, 2020 IL 124649, ¶ 30, 161 N.E.3d 183.'
The Insurance Policy at Issue
The policy provided "Combined Liability" coverage on each of the seven vehicles of up to "$1 Million each accident." The Kuhns argued that the wording of the policy and accompanying declarations were ambiguous pursuant to Illinois case law because the coverages and premiums set forth in the declarations were repeated for each insured vehicle.
Owners argued that the policy declarations were consistent with each other and not ambiguous. Owners argued the policy contained an unambiguous antistacking provision that cleared up any arguable ambiguity in the declarations and should be enforced as written. In particular, subsection 5 explicitly stated that the limits for the same or similar coverage applying to other vehicles could not be added to determine the amount of coverage for an accident.
ANALYSIS
In general, antistacking provisions in insurance policies are not contrary to public policy. In Illlinois, an unambiguous antistacking clause will be given effect by a reviewing court.
In this case, the "Limit of Insurance" provisions refer back to the declarations to define the policy limits and the declarations pages state seven separate times that the "combined liability" limit on each vehicle is $1 million for each accident.
Reading the policy as a whole and interpreting its plain language, the court concluded that the declarations are consistent, not ambiguous, and the antistacking clause set forth in the policy clarifies any possible ambiguity.
The coverages varied based on the vehicle insured; for example, the premiums for vehicle 1 and vehicle 2 (both semitrucks) were identical for liability, UIM/UM coverage, and medical payments, but only vehicle 1 had comprehensive and collision coverage.
The Antistacking Clause
Even if some ambiguity existed, the policy's antistacking clause cleared up any possible confusion.
The explicit antistacking clause of the policy, is unambiguous and should be enforced as written.
Instead of applying the Policy's clear anti-stacking provision, the trial court engaged in the very sort of tortured and strained reading of the Policy to find an ambiguity that this Court and the Illinois Supreme Court have repeatedly rejected. This was error, the trial court’s order was reversed and the case remanded with directions to enter summary judgment in favor of Owners.
ZALMA OPINION
It should be axiomatic that a trial court should never engage in tortured or strained reading of a policy to find an ambiguity that did not exist. A clear and unambiguous policy wording that refuses to allow stacking of coverages that apply to more than one vehicle insured when only one vehicle is involved in an accident, should be enforced as written. The Illinois Court of Appeals read the entire policy and found no ambiguity and insisted on enforcing the contract of insurance as written.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257
Daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
-
8:36
Barry Zalma, Inc. on Insurance Law
6 months agoZalma's Insurance Fraud Letter - January 15, 2024
212 -
LIVE
Fresh and Fit
1 hour agoUK Riots, Stock Market Crash, WW3 & More! w/ Sulaiman Ahmed
7,572 watching -
LIVE
SNEAKO
2 hours agoTHE WORLD IS CHANGING FAST...
7,784 watching -
1:39:12
Kim Iversen
6 hours agoWill This Market Crash Lead To WW3 and The Great Reset?
32.6K100 -
1:48:46
PudgeTV
3 hours ago🔵 Mod Mondays Ep 35 | Eric John Pizza | Art on Rumble
8.9K2 -
40:53
Stephen Gardner
3 hours ago🔴Entire Internet BUZZING: Kamala REGRETS These Race based comments now!
31.9K195 -
1:36:52
Glenn Greenwald
5 hours agoMassive Loss for Google After Court Rules It's An Illegal Monopoly with Antitrust Expert Matt Stoller; The U.S. Faces Multiple Crises: Who is Running the Government?; Top Dem Warned That Congress Will Ban Trump If He Wins | SYSTEM UPDATE #311
63.3K150 -
1:34:11
Donald Trump Jr.
8 hours agoKamala Krash, Iran Attack Imminent? Erik Prince Live | TRIGGERED Ep.162
159K364 -
2:18:35
WeAreChange
6 hours agoArmed GROOMING GANGS Patrolling The Streets — UK CIVIL WAR!
69.6K39 -
1:11:04
Redacted News
8 hours agoEMERGENCY! GLOBAL MARKET MELTDOWN, US DOLLAR DUMPED AS RECESSION HITS | Redacted w Clayton Morris
156K337