Opinion ID: 2611817
Heading Depth: 2
Heading Rank: 2

Heading: Stacking of UM Coverages

Text: Although the statutory language of HRS § 431-448 was silent as to stacking of UM coverage, this court has interpreted the statute as permitting the stacking of UM benefits in Walton v. State Farm Auto Ins., 55 Haw. 326, 518 P.2d 1399 (1974); Allstate Ins. Co. v. Morgan, 59 Haw. 44, 575 P.2d 477 (1978); and American Ins. Co. v. Takahashi, 59 Haw. 59, 575 P.2d 881, reh'g denied, 59 Haw. 102, 577 P.2d 780 (1978). In Walton, the plaintiff-insured John Walton was injured in an automobile accident while riding as a passenger in a vehicle owned by Gary Seto (the host driver). The driver of the other vehicle involved in the accident was uninsured. Walton recovered the maximum amount of UM coverage ($10,000) from the host driver's policy. Although Walton obtained a $25,000 judgment against the uninsured motorist, Walton was unable to collect the judgment because the uninsured motorist had voluntarily filed bankruptcy. Walton, 55 Haw. at 326-27, 518 P.2d at 1399-1400. Walton then presented his claim for $10,000 to his own insurer, State Farm Mutual Insurance Company (State Farm). State Farm argued that, in accordance with a policy provision, because Walton was injured in a vehicle it did not insure, the UM provision applied only in excess over any other similar insurance available to Walton. [6] In other words, because Walton had already collected $10,000 from Seto's insurance and, because Walton's UM coverage was also limited to $10,000, there was no excess over the other insurance (Seto's UM coverage); therefore, State Farm took the position that there could be no recovery against Walton's own insurer. We invalidated the other insurance policy provision providing only excess insurance over any other of the insured's applicable coverage and adopted the majority rule from other jurisdictions that state statutory provisions... must be interpreted as invalidating clauses in insurance policies that, if effectuated, would reduce the benefits directly payable by the injured-insured's insurer to a sum below the statutory minimum.  Id. at 328-29, 518 P.2d at 1401 (emphasis added). At that time, the statutory minimum in Hawai`i, incorporated by reference into the UM statute, HRS § 431-448, was not less than $10,000 for bodily injury to one person in any one accident. In Morgan, the plaintiff, while operating a vehicle she did not own, was injured as the result of an automobile accident with an uninsured motorist. Morgan, 59 Haw. at 45-46, 575 P.2d at 478. The plaintiff's father owned three vehicles, all insured under a single automobile policy issued by Allstate, and he paid separate premiums for each vehicle. The plaintiff, as a member of her father's household, sought to obtain and stack $10,000 in UM coverages for each vehicle insured under the policy, amounting to $30,000. Id. at 46, 575 P.2d at 479. In ruling on the declaratory action filed by Allstate, the circuit court determined that the terms of the policy at issue should be construed to permit stacking of UM coverage. Allstate appealed. On appeal, we determined that the phrase `with respect to any motor vehicle' indicates that separate [UM] coverage, in at least the minimum statutorily required amounts, must be provided for each automobile insured under a policy of liability insurance. Id. at 48-49, 575 P.2d at 480 (emphasis added). We therefore allowed the intra-policy stacking of UM coverages, notwithstanding the fact that none of the insured vehicles were involved in the accident. In Takahashi, we examined a similar issue as that raised in Morgan, that is, whether the insureds under American Insurance Company's (American) policy covering two automobiles were entitled to recover UM benefits of $20,000, the statutory minimum coverage on one automobile per accident, or $40,000 (the combined limits on both automobiles per accident), when the insureds were injured while traveling in a third, independently owned and insured automobile. The circuit court determined that the insureds were entitled to receive UM benefits, but held American liable for the maximum limit on one automobile per accident, and not both automobiles. On appeal, we determined that the limits of liability clause [7] in American's policy was inconsistent with our decision in Morgan and held that the coverage applie[d] separately but fully to both automobiles insured under the policy, Takahashi, 59 Haw. at 63-64, 575 P.2d at 883-84, stating once again that the insurer cannot reduce its liability for [UM] coverage below the statutory required minimum amounts for each uninsured vehicle. 59 Haw. at 64, 575 P.2d at 884 (citation omitted). Thus, although the UM statute did not expressly permit stacking, this court has held consistently that the language of the statute requiring minimum coverage for each insured motor vehicle provides the basis for stacking of UM coverages. Further, it is undisputed that, as a result of the aforementioned cases, the practice of stacking UM coverages has continued throughout and beyond the relevant period in this case.