In Idaho, understanding how both “stacking” and Underinsured Motorist (UIM) coverages work is essential for ensuring adequate protection in the event of a collision involving an underinsured driver. Here’s a detailed overview of these concepts:
Underinsured Motorist (UIM) Coverage
UIM coverage is designed to protect you if you are involved in a collision with a driver who does not have enough liability insurance to cover your damages. This type of coverage helps pay for medical expenses, lost wages, and other damages that exceed the at-fault driver’s liability insurance limits.
- Mandatory Offering: In Idaho, insurance companies are required to offer UIM coverage, but policyholders can choose to reject it in writing.
- Coverage Limits: UIM coverage limits are typically the same as your liability coverage limits, unless you choose lower limits.
Stacking of UIM Coverage
“Stacking” refers to the ability to combine the coverage limits of multiple policies or vehicles to increase the amount of coverage available after a collision. Idaho law allows for certain types of stacking, depending on the specifics of the insurance policy and the circumstances of the claim.
- Interpolicy Stacking:
- Interpolicy stacking occurs when you combine UIM coverage limits from multiple policies. For example, if you have UIM coverage of $50,000 on two separate auto insurance policies, you may be able to stack the limits of both policies to provide up to $100,000 in coverage.
- Idaho allows interpolicy stacking unless the insurance policy explicitly prohibits it. It is essential to review your policy to understand whether interpolicy stacking is permitted.
- Intrapolicy Stacking:
- Intrapolicy stacking involves combining the UIM coverage limits of multiple vehicles insured under a single policy. For example, if you have three vehicles on one policy, each with $50,000 in UIM coverage, intrapolicy stacking could potentially provide up to $150,000 in coverage.
- Similar to interpolicy stacking, intrapolicy stacking is allowed in Idaho unless explicitly prohibited by the policy’s terms.
Legal and Policy Considerations
- Anti-stacking Clauses: UIM policies often have anti-stacking clauses designed to minimize the amount the insurance company must pay to policyholders. Idaho courts have sometimes overridden these clauses depending on whether their wording would confuse policyholders.
- For example, in Gearhardt v. Mut. of Enumclaw Ins. Co. (2016), the Idaho Supreme Court allowed two parents to stack their UIM policies even though both had anti- stacking clauses.
- The anti-stacking clauses read: “[i]f this policy and any other policy providing similar insurance apply to the accident, the maximum limit of liability under all the policies shall be the highest applicable limit of liability under any one policy.” The Court found that this language could confuse policyholders into thinking that the combined total of all policy limits was the highest possible limits.
- The Court stressed that whenever a policy is confusing, it should be interpreted in favor of the insured. Thus, they refused to enforce the anti-stacking clause.
- On the other hand, in Erland v. Nationwide Ins. Co. (2001), the Court enforced the anti-stacking clause because they decided its language was clear and unambiguous. In that case, the anti-stacking clause stated that “if more than one policy applies, total limits applicable will be considered not to exceed the highest limits of any one of them.”
- The Court decided that this language clearly stated that the total limits could not exceed the highest limits of any one policy. Thus, they enforced the clause and refused to allow the plaintiff to stack policies.
- Illusory UIM Coverage: In Idaho, insurance companies can only sell UIM coverage that exceeds the minimum amount the state requires all motorists carry for liability insurance, which is $25,000.
- In Pena v. Viking Ins. Co. (2022), the plaintiff suffered damages over $25,000 after a collision with a negligent underinsured motorist. The underinsured motorist only carried the statutorily required minimum amount of $25,000 in liability insurance.
- After the plaintiff received $25,000 from the underinsured motorist’s liability insurance, he filed a claim to use his own UIM coverage, which provided a maximum of $25,000 in benefits.
- The defendant insurance company denied his UIM claim. The terms of his UIM policy allowed the insurance company to offset his recovery from the motorist’s insurance against his UIM coverage. Thus, because he already received $25,000 from the underinsured motorist, the insurance company decided that he had already received his maximum recovery allowed.
- The Idaho Supreme Court found that by selling UIM coverage with maximum benefits equal to the amount of liability insurance all motorists must maintain, the insurance company was selling “illusory” UIM coverage. Because all underinsured motorists in Idaho have $25,000 in liability insurance, the insurance company sold the plaintiff a UIM benefit that he could practically never use.
- The Court decided the terms of the UIM policy were therefore unenforceable and forced the insurance company to pay the UIM benefit.
- UIM Coverage and Wrongful Death Cases: In Lanningham v. Farm Bureau Mut. Ins. Co. of Idaho (2024), the Idaho Supreme Court held that a deceased person’s estate does not receive their UIM benefits. In that case, two sons argued that their father’s estate should inherit his UIM benefits. The Court decided that the sons could only receive the benefits if the policy identified them as insureds, which it did not. Thus, the estate could not receive any wrongful death benefits from the deceased’s UIM policy.
Practical Example
Suppose you have a UIM coverage limit of $100,000 on each of your two vehicles insured under separate policies. If you are involved in a collision with an underinsured driver, and your damages amount to $150,000, you could potentially stack your UIM coverage to access a total of $200,000 in coverage (combining $100,000 from each policy) if your policies allow stacking.
Conclusion
In Idaho, stacking UIM coverage can provide significant additional protection in the event of a collision involving an underinsured driver. Understanding whether your policy permits stacking and the specifics of how it applies to your situation is critical. It will also be critical to assess if the policy language will be enforceable or not. Reviewing your insurance policy terms and consulting with an insurance professional or attorney can help ensure you maximize your available coverage. For more detailed information, you can refer to the Idaho State Legislature’s website and consult with one of our local personal injury attorneys by calling 1-800-273-5005.
References
- Idaho Statutes
- Idaho Department of Insurance
- FindLaw: Idaho Underinsured Motorist Coverage
- NOLO: Stacking Car Insurance
- Gearhardt v. Mut. of Enumclaw Ins. Co., 160 Idaho 664, 378 P.3d 454 (2016)
- Erland v. Nationwide Ins. Co., 136 Idaho 131, 30 P.3d 286 (2001)
- Pena v. Viking Ins. Co., 169 Idaho 730, 503 P.3d 201 (2022)
- Lanningham v. Farm Bureau Mut. Ins. Co. of Idaho, 2024 Ida. Lexis 71 (July 3, 2024)