Arizona Confirms Two "Claims" Against Two Drivers Arising From One Accident Does Not Allow Insured to Stack UIM Coverage
Yeager v. State Farm Mut. Auto Ins. Co., 2017 WL 491121 (Ariz. App. February 7, 2017)
Memorandum Decision, a declaratory judgment action, the Arizona Court of Appeals rejected an Insured’s argument that she could stack UIM coverage’s in separate policies issued by the same Insurer. The Insured was involved in a single accident, but argued she made “two” claims—one UIM claim against the negligent driver of the other vehicle and a second UIM claim against the negligent driver of the vehicle in which she was a passenger.
Arizona’s anti-stacking statute, ARS § 20-259.01(H), states, “If multiple policies or coverage’s purchased by one insured on different vehicles apply to an accident or claim, the insurer may limit the coverage so that only one policy or coverage, selected by the insured, shall be applicable to any one accident.” (emphasis added)
The Court of Appeals held the anti-stacking clause in the Insurer’s policy was valid for two primary reasons.
First, the Court of Appeals relied on Giannini v. State Farm Mut. Auto. Ins. Co.,172 Ariz. 468, 837 P.2d 1203 (App. 1992), which rejected the same argument in the same situation. In Giannini,the Court of Appeals reasoned the existence of two negligent drivers in a single accident did not affect an Insurer’s ability to limit stacking under the statute because more than one accident did not occur and the “statute states clearly that the insurer may limit coverage so that only one policy is applicable to any one ‘accident.’” See also State Farm Mut. Ins. Co. v. Sharp,229 Ariz. 487, 491, 277 P.3d 192, 196 (2012) (“The most reasonable interpretation of Subsection (H) is that the phrase ‘multiple policies or coverage’s’ applies when an insured obtains coverage’s for several vehicles and then attempts to claim multiple UIM coverage’s for the same accident.”).
Second, the Court of Appeals held the anti-stacking clause was unambiguous and complied with the Statute. The policy’s anti-stacking clause stated, “If multiple policies or coverage’s purchased from the [Insurer] by one insured on different vehicles provide Underinsured Motor Vehicle Coverage which applies to the same accident or claim, the insured shall select one of these policies or coverage to apply to the accident. Only the one policy selected by the insured shall apply and no coverage will be provided by any of the other policies.” (emphasis added)
What is the primary takeaway from Yeager for Arizona insurers?
Arizona has confirmed that, even if an accident involves two tortfeasors, if an Insurer’s anti-stacking clause is unambiguous and complies with the statute, then the Insured still may not stack UIM coverage’s.
About the Author: Nathan D. Meyer is a Partner at the Phoenix law firm of Jaburg Wilk. One of his specialties is insurance coverage and bad faith. Nate advises and represents insurance clients in coverage, bad faith, contribution and liability matters.