Opinion ID: 886552
Heading Depth: 1
Heading Rank: 8

Heading: Anti-Stacking Provision

Text: ¶ 37 Finally, we consider whether the anti-stacking provision in the State Farm policies violates Montana public policy. Mitchell contends that the anti-stacking provision violates public policy because it permits State Farm to charge a premium for coverage that is defeated by the provisions of the policy. State Farm counters that § 33-23-203, MCA, expressly permits the anti-stacking provision. ¶ 38 We recently held that § 33-23-203, MCA, is unconstitutional to the extent that it allows an insurance company to charge a premium for illusory coverage. Hardy, ¶ 38. The anti-stacking provision in this case permits State Farm to charge premiums for five separate uninsured motorist coverages in spite of the fact that the anti-stacking provision only permits Mitchell to recover for one coverage. Therefore, § 33-23-203, MCA, violates substantive due process, see Hardy, ¶ 38, and is not controlling. In the absence of a legislative directive, we must review the anti-stacking provision in light of this Court's proclamation of public policy. ¶ 39 An insurance policy cannot include provisions that defeat coverage for which valuable consideration was received. Bennett, 261 Mont. at 389, 862 P.2d at 1148. Pursuant to Montana case law, uninsured motorist coverage may be stacked when separate premiums are charged for coverage on more than one vehicle. Chaffee v. U.S. Fid. & Guar. Co. (1979), 181 Mont. 1, 6, 591 P.2d 1102, 1105. In short, an anti-stacking provision that permits an insurer to receive valuable consideration by charging premiums for coverage that is not provided, violates Montana public policy. Any limitations on coverage must be reflected in the premium charged. ¶ 40 Moreover, uninsured motorist coverage is both personal and portable. Jacobson v. Implement Dealers Mut. Ins. Co. (1982), 196 Mont. 542, 547-48, 640 P.2d 908, 912. In Hardy, the declarations page indicated that four coverages had been purchased. However, the anti-stacking provision only permitted the insured to recover one amount of coverage. We held that the anti-stacking provision defeated the insurance consumer's reasonable expectation that multiple coverages could be aggregated because it destroyed the personal and portable nature of underinsured motorist coverage. Hardy, ¶¶ 44-45. ¶ 41 State Farm charged five premiums for five uninsured motorist coverages. However, Mitchell can only receive one amount of coverage. ¶ 42 In Hardy, ¶ 45, we concluded that limitations of this nature violated the consumer's reasonable expectation that underinsured motorist coverage was personal and portable. The same holds true for uninsured motorist coverage. The anti-stacking provision in the instant policies contravene Mitchell's reasonable expectation that uninsured motorist coverage is personal and portable. Consequently, we conclude that the anti-stacking provision in Mitchell's policies violate the public policy of this state and is void. ¶ 43 We conclude that Montana law applies to this case. Pursuant to Montana law, we conclude that the District Court was incorrect when it held that the underinsured motorist definition in the State Farm policies was valid in Montana. Furthermore, we conclude that the District Court was incorrect when it held that Montana public policy permitted the anti-stacking provision in the State Farm policies. ¶ 44 Based upon the foregoing conclusions, we reverse the judgement on the District Court and remand this case to the District Court for further proceedings consistent with this Opinion. We Concur: JIM REGNIER, W. WILLIAM LEAPHART, JAMES C. NELSON and PATRICIA COTTER, JJ.