Howell v. Harleysville Mutual InsuranceHowell v. Harleysville Mutual Insurance
We shall hold in this case that there cannot be intra-policy “stacking” or pyramiding of uninsured motorists benefits. The case arises on certification of a question of law from the United States District Court for the District of Maryland pursuant tо Maryland Code (1974) § 12-601, Courts and Judicial Proceedings Article. The question certified is:
“Whether the Harleysville insurance policy issued to Pritchett and Maryland law permit the stacking or aggre *437 gating of uninsured motorists coverage under the fаcts of this case?”
The facts are gleaned from the stipulation entered into by the parties in the United States District Court.
On November 13, 1982, John W. Howell was an employee of Pritchett Transportation Company, Inc., and was driving a van owned by Pritchett. Harleysville Mutual Insurance Company insured the van. Howell was injured in a collision with an uninsured motor vehicle. His injuries were severe and as of the time of the stipulation his medical bills exceeded $55,000. The Harleysville рolicy had an uninsured motorists endorsement, one required by Code (1957, 1979 Repl. Vol., 1985 Cum.Supp.) Art. 48A, § 541(c)(2). 1 Howell presented an uninsured motorists claim to Harleysville under its policy. The claim was denied because Harleysville had paid Howеll in excess of $50,000 pursuant to Pritchett’s workmen’s compensation insurance policy, also carried with Harleysville in a separate policy. Code (1957, 1979 Repl. Vol.) Art. 48A, § 543(d) provides, “Benefits payable under the coveragеs required in §§ 539 and 541 of this article shall be reduced to the extent that the recipient has recovered benefits under workmen’s compensation laws of any state or the federal government.” As we shall see, a similar provisiоn is in subject policy.
Pritchett is a U.S. mail carrier with its principal place of business at Cambridge, Maryland. The policy in question carried uninsured motorists endorsements for nineteen vehicles.
Item Two on the declaration page of the policy, entitled schedule of coverages and covered autos, shows under uninsured motorists coverage that the most that will be paid for any one accident or loss is $50,000. A premium of $76 was charged for that coverage.
*438 The uninsured motorists endorsement states in relevant part:
“D. WHO IS INSURED
1. You or any family member.
2. Anyone else occupying a covered auto or a temporary substitute for a covered auto____
3. Anyone for damages he is entitled to reсover because of bodily injury sustained by another insured.”
The term “you” is defined in the policy as “meaning] the person or organization shown as the named insured in ITEM ONE of the declarations.” The limit of liability set forth states in pertinent part:
“E. OUR LIMIT OF LIABILITY
1. Rеgardless of the number of covered autos, insureds, claims made or vehicles involved in the accident, the most we will pay for all damages resulting from any one accident is the limit of UNINSURED MOTORISTS INSURANCE shown in the declarations.
2. Any amount payable under this insurance shall be reduced by:
a. All sums paid or payable under any workers’ compensation, disability benefits or similar law, and
b. All sums paid by or for anyone who is legally responsible, including all sums paid under the policy’s LIABILITY INSURANCE.”
Howell contends that the policy is ambiguous. He further contends that a premium has been charged for each vehicle. Thus, he would multiply the coverage per vehicle by the number of vehicles.
We have dealt with stacking previously.
See, e.g., Rafferty v. Allstate Ins. Co.,
Howell relies upon
Langston v. Allstate Ins. Co.,
There is a decided split of authority around the country on intra-policy stacking. See Note,
Intra-Policy Stacking of Uninsured Motorist and Medical Payments Coverages: To Be Or Not To Bе,
22 S.D.L.Rev. 349, 351 n. 10 (1977). In fact, that note indicates that as of the time it was written of twenty-three states dealing with the question of intra-policy stacking thirteen had refused to allow such stacking. However, in dealing with the question of whether a claimant-employee should be permitted to stack the coverages provided under a commercial fleet policy insuring several vehicles for which separate premiums were paid, the courts are virtually unanimous. Cаses not permitting stacking include:
Fuqua v. Travelers Ins. Co.,
J. Appleman, Insurance Law and Practice, § 5106 (1981), has written on the subject:
*440 “Ordinarily, when a company issues a single policy insuring more than one vehicle, the insured secures a рreferential or discounted rate. Irrespective of this consideration, when a single policy is issued, covering more than one vehicle, the proper rule seems to be that the limit prescribed as to UM coverаge — that is, the designated limit — controls in any single occurrence whether one, or more than one, person is injured; that is, if the policy is 10/20, the 10 applies to one person, the 20 to all injured in that occurrence. This is not increased, ordinarily, either by statute or by a separability clause; and, despite the confusion of some courts which seem to feel that, somehow, the insurer is deriving an unwarranted windfall, the proper rule remains that liability is not increased by the fact that a separate premium was charged for each such coverage relating to the several vehicles, or for nonowned coverage. Where one does insure several vehiclеs, but is not driving or riding in one of them at the time of injury by an uninsured motorist (he may either be a passenger in another’s automobile, or driving a non-owned vehicle), the highest single limit of liability obtaining as to any one of his insured vehicles will apply to protect him. Such is generally expressly stated in the policies, and the policy limits cannot then be cumulated to arrive at a different result.” Id. at 528-33 (footnotes omitted).
Appleman deals in § 5101 with the argument made by Howell here that a premium has been paid for an uninsured motorist endorsement for each vehicle:
“Let. us take, as a starting point, a fleet, or several vehicles, policy issued to a single insured. If we desire to carry this to a point of absurdity, let us say that the policyholder is a city, owning a thousand automobiles, with an uninsured motorist coverage of $50,000. If we said that the risk, in any one collision, then would be the cumulative total, or stacked coverage, in any one incident the company’s exposure would be 50 million dollars as to each vehicle — an absurdity, which no company could pos *441 sibly afford to insure. Yet, pursuing the logic indulged in smaller risk cases some decisions have reached precisely that result.
“If that were reasonable, then we should say that the liability exposures should be similarly stacked; and if the liability limit were one million dollars, the exposure automatically would become one billion. No such contention evеr has been made, to the knowledge of the authors, nor is it likely that any court would proceed to such length. If it is not reasonable to argue for a doubling or tripling of liability limits when there is a single policy owner, and a single comрany, then it is not reasonable to urge such a position for uninsured motorist coverages. Yet, as we shall see, the majority of courts have confused themselves upon this issue, feeling that unless they double up such UM coveragе, the insurer somehow receives a windfall, since it charges a separate premium for each coverage as it applies to a separate automobile.
“Let us analyze this reasoning, for a moment. If thеre were but a single insured, and only he ever drove an automobile, obviously he can drive only one vehicle at a time and the reasoning of such courts might then be logical. But, in considering basic underwriting and the actuarial computation of rate structures, we must take into consideration the customary procedures of mankind. Automobile policies are now written so as to afford liability protection not only to the named insured, who is usually the оwner, but to members of his family, perhaps persons residing in the same household, and — with a few exceptions — anyone operating with the permission of the named insured or adult members of his household. When it comes to UM coverаges, we have a like multiplication of exposure, since we have classes of risk, including all of the persons stated above, and pedestrians as well, with benefits granted in many circumstances when one may be in another vehicle or even upon the highway.
“When the insured then owns more than a single vehicle, almost always it is with the contemplation that the *442 second, or third, vehicles will be operated by others. And those others may, also, if injured by an uninsurеd motorist, expose the insurer to loss under that aspect of the contract.
“Now it could not reasonably be argued that an insured owning several automobiles could insure only one of them for liability, or for collision, or сomprehensive, damages— yet collect as to any loss inflicted by, or upon, any of those vehicles he elected not to insure. Yet this is precisely the result for which policyholders, or their counsel, contend under UM сoverages and which has been Upheld repeatedly by the courts. Similarly, it is no more logical to double, or triple, a single limit of UM coverage, the amount of which the insured deliberately selected, and tender it free tо the insured.
“We may summarize the situation where there is a single policy owner, single company, and multiple vehicles by saying that the proper result is: ‘What you buy is what you get — and no more.’ It is timé for those courts, which have been so genеrous with the funds of others, to take a new look at this problem.” Id. at 444-51 (footnotes omitted).
Views similar to that expressed by Appleman relative to the high exposure for a small premium have been expressed in
Lambert,
A total of 19 vehicles were insured. Applying the mathematics mentioned by Appleman and certain of the cases we would find that if Howell’s contentions were to prevail there would be an exposure for each vehicle of $950,000 (19 X $50,000). If all 19 vehicles were on the road at one time the total exposure of the insurance company would be $18,050,000 (19 x $950,000). All of this coverage would be available for a premium of $76. This would be a truly absurd result.
*443
Where there is no ambiguity in an insurance contract thе court has no alternative but to enforce the policy’s terms. Words are to be given their customary, normal meaning when insurance contracts are interpreted.
DeJarnette v. Federal Kemper Ins. Co.,
QUESTION OF LAW ANSWERED AS HEREIN SET FORTH; COSTS TO BE EQUALLY DIVIDED.
Notes
. Coverage required under such an endorsement must be no "less than the coverage afforded a qualified person under Article 48A, §§ 243H and 243-1,” that is $20,000 per person and $40,000 per accident.