Can a Plaintiff Stack Multiple UM Insurance Policies to Allow More Money to be Available?

A recent case decided by Louisiana Supreme Court, Forvendel v. State Farm Mutual Automobile Ins. Co.,  addresses whether a plaintiff can stack multiple UM insurance policies to allow more money to be available to him or her.

What is UM Insurance Coverage?

Uninsured or Underinsured (UM) insurance coverage typically applies to a driver or occupant of a vehicle who was injured in an accident that was caused by an uninsured or underinsured negligent driver. Louisiana law requires that every auto insurance policy issued in the state include UM coverage, unless expressly rejected in writing. When an individual is injured by a negligent uninsured or underinsured driver, the injured individual can make a claim against the UM coverage of his or her own policy. In essence, the UM coverage takes the place of the liability coverage that the negligent driver failed to carry.

Can a plaintiff Stack Multiple UM Insurance Policies To Allow More Money To Be Available?

In Louisiana, the stacking of multiple UM insurance policies is prohibited by the Anti-Stacking provision contained in LA R.S. 22:1295. There is an exception to the Anti-Stacking provision, but it only applies when the plaintiff is injured while occupying a vehicle not owned by him or her, or by a resident spouse or by a resident relative. In that situation, the UM coverage on the vehicle that the plaintiff was occupying would be primary, and if exhausted, the plaintiff could then choose to recover any excess under only one other UM policy available to the plaintiff.

Forvendel v. State Farm Mutual Automobile Ins. Co.

The Anti-Stacking statute applied to the plaintiff in Forvendel v. State Farm Mutual Automobile Ins. Co. because the plaintiff owned the vehicle that he was occupying at the time of the accident. The question in this case was whether State Farm waived its right to assert the Anti-Stacking defense in future cases involving the same plaintiff because it had mistakenly allowed that plaintiff to stack and be paid on two UM policies following an accident in 2007.

In 2013, the plaintiff was involved in another accident and again sought to recover for his claims under his and his mother’s UM insurance policies. State Farm denied coverage to plaintiff under his mother’s UM policy, but plaintiff argued that State Farm had already waived its defense to stacking coverages when it paid on his and his mother’s UM policy following an accident in 2007. The trial judge agreed with plaintiff and the court of appeals affirmed the trial court’s decision.

The Louisiana Supreme Court reviewed the lower courts’ decision and reversed, holding that State Farm did not waive its right to assert the Anti-Stacking defense to the plaintiff’s claim seeking UM benefits under both his and his mother’s insurance policies. In addition, any purported waiver by State Farm of its defenses with regard to the 2007 claim did not constitute a waiver with regard to the 2013 claim. The Court further stated that accepting such an argument would result in the absurd conclusion that State Farm would be forever precluded from raising the Anti-Stacking defense in any future claim filed by the plaintiff.