There is a growing trend in which plaintiffs are seeking to recover Uninsured/Underinsured motorist (“UM”) coverage under a “stacking” framework, intending to combine the coverage of the other vehicle policies he or she owns, despite those policies being designated as “non-stacking.” This is improper under most insurance contracts and Florida case law.
In general, UM coverage protects the insured against bodily injuries sustained by another’s negligence arising from the use of a motor vehicle, regardless of location or circumstances, and where such tortfeasor does not have insurance, or does not have enough insurance to make the plaintiff whole.[1] Florida law currently recognizes two types of UM coverage: “stacking” and “non-stacking.”[2] There are many important distinctions between “stacking” and “non-stacking” UM coverage under Florida Law, but “the key difference between stacking and non-stacking coverage is that ‘unlike stacked coverage, non-stacked coverage does not provide coverage for every vehicle that the insured owns—it only provides coverage for the vehicle on which the UM premium was paid.’”[3] Furthermore, “stacking” coverage is the standard, meaning that an insured can only have “non-stacking” coverage if he or she specifically signs and requests such policy through an approved Office of Insurance Regulation (“OIR”) form, commonly known as a selection/rejection form.
There is a significant benefit to paying higher premiums to obtain “stacking” coverage. “Stacking” coverage allows the insured to collect in the aggregate of all of his or her vehicle policies as opposed to the single highest limit. To utilize stacking coverage for multiple vehicles, all the relevant policies typically need to be “stacking” policies. If a claimant is involved in an auto accident in a vehicle with a “non-stacking” policy, he or she will be limited to the coverage of that “non-stacking” policy for claims related to that vehicle. In general, for “stacking” to apply effectively across multiple vehicles, each insured’s vehicle policies must allow for “stacking.”
There has been an uptick in plaintiffs arguing that there is no benefit to “stacking” coverage where a plaintiff does not own any other vehicles or owns another vehicle with no UM coverage. Florida Courts have routinely found this argument to be without merit as there are significant benefits to “stacking” UM policies, regardless of how many other vehicles are owned by the insured. As such, insureds that select “non-stacking” coverage do not get the benefit of aggregate coverage, but also do not benefit if they are in an insured-owned vehicle that does not have UM coverage.[4]
The district court in Swan v. State Farm laid out this specific issue related to multiple vehicles, with only one being “stacking.” In such case, “Mr. Swan paid a premium for stacked coverage on the Honda, but rejected UM coverage on the Acura [so] it does not matter which vehicle he and his wife were occupying at the time of the accident. He and his wife would be entitled to UM benefits under the Honda policy, even if they were occupying the Acura.”[5] Stated differently, the plaintiff in Swan could use his stacking policy in a vehicle that was not covered under any UM policy.[6] The court in Swan continued to explain such coverage would not have been possible if the Honda, was covered under a non-stacking policy.[7] These are just some of the protections that insureds give up in exchange for a lower insurance premium.
Further, in attempts to argue that a “non-stacking” policy should be treated as a “stacking” policy and thus be aggregated, a rising trend is the argument that a replacement vehicle or change in premium costs invalidates the previously signed selection/rejection form and creates a “stacking” policy. Florida courts have routinely held that this is not the case. It is important to note that the insured has the option of deciding the type and amount of UM coverage when choosing their policy. Florida Statute requires that insurers provide “stacking” coverage to their insured “unless the insured either makes a written rejection of the coverage on behalf of all insureds under the policy, or the insured elects to accept ‘non-stacked’ UM coverage from the insurer.”[8] If the insured elects to have “non-stacking” coverage, their coverage will not extend to the other vehicles; instead, “it only provides coverage for the vehicle in which the premium was paid.”[9]
Section 627.727 requires specific actions of the insurer to confirm that rejection of any kind is valid. These actions include specific language/font in the selection/rejection form, annual reminders related to coverage options, when the coverage must be selected, etc.[10] As it relates to when coverage must be selected, section 627.727 states that
When an insured . . . has initially selected limits of uninsured motorist coverage lower than her or his bodily injury liability limits, higher limits of uninsured motorist coverage need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits unless an insured requests higher uninsured motorist coverage in writing.
Accordingly, merely replacing a vehicle with another vehicle does not trigger the need to offer uninsured motorist coverage on an existing policy where the liability limits of the policy remain the same.[11]
Per the statute, unless an insured attempts to materially change their policy to add additional bodily injury liability limits or requests a change in UM coverage in writing, a new selection/rejection form is not required. This means that some insurers may have selection/rejection forms that have a different vehicle’s information or may be many years old. Under the statute, such selection/rejection forms continue to be valid.
In cases where a plaintiff attempts to “stack” his or her “non-stacking” policies, the proper mechanism for defense is a motion for summary judgment, as contractually and through case law, all facts indicate that a singular policy is relevant. Unlike “stacking” UM coverage, “non-stacking” UM coverage is explicitly designed to limit the coverage to the individual policy limits without allowing for aggregation. As such, collection under such policy is improper and plaintiff’s attempt to allege such claim in a complaint must be foreclosed.
[1] Coleman v. Fla. Ins. Guar. Ass’n, Inc., 517 So. 2d 686, 689 (Fla. 1988).
[2] See generally § 627.727(9), Fla. Stat.
[3] State Farm Fire & Cas. Ins. Co. v. Wilson, 330 So. 3d 67, 74 (Fla. Dist. Ct. App. 2021) (quoting Swan v. State Farm Mut. Auto. Ins. Co., 60 So. 3d 514, 518 (Fla. 3d DCA 2011)).
[4] Id. (citing§ 627.727(9)(d), Fla. Stat.); id. (explaining “non-stacking” coverage, which is normally about 20% cheaper than “stacking” coverage, creates limitations.
[5] Swan, 60 So. 3d at 519.
[6] Id.
[7] Id.
[9] Swan 60 So. 3d at 519.
[11] Gasch v. Harris, 808 So. 2d 1260, 1262 (Fla. 4th DCA 2002); See Government Employees Ins. Co. v. Stafstrom, 668 So. 2d 631, 633 (Fla. 5th DCA 1996) (holding that the addition of a new vehicle to an existing policy was a change in the policy that did not require a new selection/rejection form); Sentry Ins. v. McGowan, 425 So. 2d 98, 99 (Fla. 5th DCA 1982); State Farm Mut. Auto. Ins. Co. v. Bergman, 387 So. 2d 494, 495 (Fla. 5th DCA 1980); United States Fid. & Guar. Co. v. Waln, 395 So. 2d 1211, 1214 (Fla. 4th DCA 1981); Nationwide Mut. Fire Ins. Co. v. Hild, 818 So. 2d 714, 717 (Fla. 2d DCA 2002); Allstate Ins. Co. v. Durham, 838 So. 2d 1254, 1257 (Fla. 5th DCA 2003).