The stacking of policies refers to the practice of combining insurance coverage limits to account for more than one vehicle insured under a multi-car policy, or under separate policies of insurance.  Stacking has been the subject of many appellate decisions in recent years, particularly in the context of underinsured motorist coverage.  Although the great majority of policies contain language that seeks to preclude the stacking of coverage (appropriately termed “anti-stacking” provisions), such language is not uncommonly deemed ambiguous by courts and rendered unenforceable so to permit stacking of certain coverages.

Liability Coverage

Where a single policy of liability insurance is issued covering multiple vehicles, only one of which was involved in the accident causing injury, the single limit of liability applies.  O’Rourke v. Esurance Insurance Company et al., 325 S.W.3d 395 (Mo. Ct. App. 2010); National Union Fire Insurance Company of Pittsburgh, Pa. v. Maune, 277 S.W.3d 754 (Mo. Ct. App. 2009); Mazzocchio v. Pohlman, 861 S.W.2d 208 (Mo. Ct. App. 1993).

However, the Supreme Court of Missouri has recently held that where there are two policies covering a single automobile, both an ownership policy and an operator’s policy, anti-stacking clauses contained in the policies are void as against public policy (Missouri’s Motor Vehicle Financial Responsibility Law requiring at least $25,000 per person and $50,000 per occurrence in liability coverage).  Karscig v. McConville, et al., 303 S.W.3d 499 (Mo. banc 2010).  Thus, the insurer was required to pay the $25,000 limit under each of the two liability policies.  It should be noted that the court in O’Rourke, in discussing the distinction between a single policy insuring multiple vehicles and multiple policies insuring the same vehicle, held that the financial responsibility law “only requires $25,000 for each insured vehicle involved in an accident, not $25,000 multiplied by the number of vehicles insured under one policy….”  O’Rourk v. Esurance Insurance Company, et al., 325 S.W.3d at 398.

Uninsured Motorist Coverage

Issues pertaining to the stacking of uninsured motorist (UM) coverage can generally be broken down into two categories.  The first category relates to stacking of coverages on behalf of the named insured or a resident member of the named insured’s household.  In this context, Missouri case law is well-settled that UM coverage can be stacked given the statutory mandate for UM coverage, Mo. Rev. Stat. § 379.203, and the strong public policy derived from the statute.  Cameron Mutual Insurance Co. v. Madden, 533 S.W.2d 538 (Mo. 1976).  “Anti-stacking” provisions with respect to the named insured are void regardless of whether UM coverages were provided by the same or different insurers.  Galloway v. Farmers Insurance Company, Inc., 523 S.W.2d 339 (Mo. Ct. App. 1975).  Further, public policy mandates that when an insured has two separate policies containing UM clauses, effect shall be given to both coverages without reduction or limitation by policy provisions, and that both coverages are available to those insured under the policy.  Bergtholdt v. Farmers Insurance Company, Inc., 691 S.W.2d 357 (Mo. Ct. App. 1985).

The second category relates to an “occupancy” insured – that is, an occupant of the insured vehicle other than the named insured and household residents.  Under this scenario, appellate courts have historically held that stacking is not required.  Hines v. Government Employees Insurance Company, 656 S.W.2d 262 (Mo. banc 1983).  In fact, current case law holds that Missouri’s Motor Vehicle Financial Responsibility Law and the UM statute do not require that an insurer provide any UM coverage to an occupant of an insured vehicle where the policy excludes such occupants by its terms (although this holding is currently being challenged in appellate courts).  Hines; Byers v. Shelter Mutual Insurance Company, 271 S.W.3d 39 (Mo. Ct. App. 2008).

Public policy does not require stacking of UM coverages on fleet vehicle commercial policies where the individual’s eligibility for payment of UM coverage arose solely from his occupancy of a vehicle.  Linderer v. Royal Globe Insurance Company, 597 S.W.2d 656 (Mo. Ct. App. 1980).  Further, public policy does not require the “doubling” of UM policy limits where multiple UM vehicles contributed to cause an accident. Tresner v. State Farm Mutual Insurance Company, 957 S.W.2d 380 (Mo. Ct. App. 1997).

In contrast to Missouri law, Illinois courts have held that “[i]nsurance policy provisions intended to limit the aggregation of coverage – generally referred to as antistacking provisions – do not undermine the legislative purpose supporting the mandate of uninsured motorist protection.”  Bruder v. Country Mutual Insurance Company, 620 N.E.2d 355, 358 (Ill. 1993).  Further, “anti-stacking” provisions do not conflict with the “premium rule” – the rule holding that it is unfair to permit an insurer to collect premiums and thereafter apply a provision limiting or absolving liability.  Id.  Thus, in Illinois, a policy’s “anti-stacking” provision may be enforced to preclude stacking of UM coverages where the policy language is unambiguous.  Id.

Underinsured Motorist Coverage

Unlike UM coverage, there is no statute in Missouri mandating underinsured motorist (UIM) coverage, so the existence of UIM coverage and the ability to stack is typically determined by the contract entered into between the insured and insurer.  Rodriguez v. General Accident Insurance Company, 808 S.W.2d 379 (Mo. 1991).

However, in interpreting insurance policies, Missouri courts have held UIM “anti-stacking” provisions ambiguous, thereby entitling an insured to stack UIM coverage in certain contexts.  In fact, a significant number of recent opinions analyzing the enforceable nature of “anti-stacking” provisions in UIM policies have identified ambiguities within the policy so as to deem the “anti-stacking” provision unenforceable.  These ambiguities are not necessarily found in the “anti-stacking” language itself, but instead, in other policy provisions that courts find incongruous with the “anti-stacking” language.

For example, where “Other Insurance” clauses found in two separate automobile policies provide that UIM coverage will be excess over “any other similar insurance,” Missouri courts have held that the phrase could be interpreted as one policy providing UIM coverage excess to such coverage provided in another policy; thus, the coverages under the policies stack despite the presence of “anti-stacking” provisions in both. American Family Mutual Insurance Company v. Ragsdale, 213 S.W.3d 51 (Mo. Ct. App. 2007); Chamness v. American Family Mutual Insurance Company, 226 S.W.3d 199 (Mo. Ct. App. 2007); Ritchie v. Allied Property & Casualty Insurance Company, 307 S.W.3d 132 (Mo. 2009).  However, in Stewart v. Liberty Mutual Fire Insurance Company, 349 S.W.3d 381 (Mo. Ct. App. 2011), the Court of Appeals for the Western District of Missouri distinguished the UIM coverage’s “Other Insurance” clause from those at issue in theRagsdale, Chamness, and Ritchie policies, noting that the clause stated that UIM coverage was excess over applicable primary coverage.  Thus, the court reasoned, the “Other Insurance” clause could not reasonably be understood to allow the stacking of multiple UIM coverages since UIM coverage was not primary.  Since there was no conflict between the “anti-stacking” provision and the “Other Insurance” clause, the policy was not ambiguous and the “anti-stacking” provision was enforced.

In addition, Missouri courts have held that if the policy of insurance intertwines UM and UIM coverages to the point where there is an ambiguity between the two, an insured is permitted to stack the UIM coverages. Bauer v. Farmers Insurance Company, 270 S.W.3d 491 (Mo. Ct. App. 2008); Niswonger v. Farm Bureau Town & Country Insurance Company of Missouri, 992 S.W.2d 308 (Mo. Ct. App. 1999) (where UM and UIM coverages were “lumped together” as one coverage on the declarations page and a single premium was charged for both, even though the coverages were defined and treated separately in the policy itself).

As in Missouri, Illinois courts will enforce “anti-stacking” provisions so long as they are clear and unambiguous.  “[M]ost cases in which the court has found that an insurance policy allows stacking have done so on the basis that the language of the policy was ambiguous because the declarations sheet listed more than one vehicle with separate coverages and separate premiums.”  Hanson v. Lumley Trucking, LLC, 932 N.E.2d 1179, 1182 (Ill. App. Ct. 2010); see e.g., Johnson v. Davis, 883 N.E.2d 521 (Ill. App. Ct. 2007) (where the court found that stacking was allowed under the policy because the limits of the UIM coverage were listed four separate times, once for each vehicle covered, and four separate premiums for the UIM coverage were also listed on the declarations sheet).  However, merely listing the premiums for each covered vehicle separately, without more, does not create an ambiguity so to permit stacking.  Hanson, 932 N.E.2d at 1182.

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