Generally, stacking is defined “as an insured’s ability to obtain multiple insurance coverage benefits for an injury either from more than one policy, as where the insured has two or more separate vehicles under separate policies, or from multiple coverages provided for within a single policy, as when an insured has one policy which covers more than one vehicle.” Niswonger v. Farm Bureau Ins., 992 S.W.2d 308, 313 (Mo. App. E.D. 2009). Until recently, Missouri had no statutory requirements for UIM coverage and there was no public policy requirement that UIM coverage be stacked. Id. at 313-14. Recently, the Missouri Court of Appeals considered the question of whether, and under what circumstances, UIM benefits could be stacked under Missouri law. In Martin v. Auto Owners Ins. Co., 2016 WL 145299 (Mo. App. W.D. 2016), the Missouri Court of Appeals stated that if an insurance policy unambiguously forbids stacking that the Court would not create extra coverage and would abide by the terms of the policy entered into between the insured and the insurer. However, if the policy was ambiguous on that issue, the Court would construe the policy in favor of the insured and thereby allow stacking to occur.
In Martin, the insureds owned three automobiles that were insured by Auto Owners. The declarations pages of the Auto Owners policy listed UIM coverage separately under each vehicle and showed a separate premium was charged for each vehicle for the UIM coverage. The declarations pages listed policy limits under each vehicle next to each of the three separate UIM premiums. The policy also contained a limit of liability “anti-stacking” clause which provided as follows: “The Limit of Liability is not increased because of the number of: (1) Automobiles shown or premiums charged in the Declarations; …” The policy limit of liability clause provided that: “[w]hen Underinsured Motorist Coverage applies to two or more automobiles, the limit of liability stated for ‘each person’ shall not be stacked to provide higher limits of liability than would apply if coverage applied to only one automobile.” Finally, the UIM portion of the policy contained an other insurance provision. Under the other insurance provision, if there was other UIM coverage applying to the accident on a primary basis with the automobile being occupied, Auto Owners would pay only its share of the damages. Auto Owners’ share was a ratio of the Auto Owners’ limit of liability to the total limits of all UIM coverage which applied. The other insurance clause provided that the total damages payable would not exceed the limit of the applicable policy which had the highest limit of liability for UIM coverage. Based upon this policy language, the trial court granted summary judgment in favor of Auto Owners. The Court found that the policy language:
leaves no question as to the limits of liability regardless of how the premiums were charged. The policy clearly and unequivocally reads that the charging of multiple premiums does not operate to permit stacking. The anti-stacking language in the UTM endorsement reinforces that conclusion. At the time of the purchase of the policy, the insured could not have reasonably had any other understanding.
On appeal, the Missouri Court of Appeals held that “the promise of excess coverage in the other insurance provision read in conjunction with the anti-stacking provision and disclaimer purporting to take away such coverage create[d] an ambiguity to be resolved in favor of the insured, who, without contest, was a person ‘occupying any other automobile’ at the time of his injury.” Id. at *5 relying upon Ritchie v. Allied Property & Cas. Ins. Co., 307 S.W.3d 132 (Mo. en banc 2009) and Manner v. Schiermeier, 393 S.W.3d 58 (Mo. en banc 2013).
The Court held that the Auto Owners policy in question created an ambiguity. On the one hand, the limit of liability section of the policy indicated that the limit of liability would not be increased by the premiums charged and when two or more automobiles UIM coverage applied under the policy the limits could not be stacked. If the Auto Owners policy went no further there would be no ambiguity. However, the policy’s other insurance clause in the UIM coverage was not limited only to UIM coverage which exists outside of the Auto Owners policy. By not having such a limitation, the other insurance clause applied not only to other UIM policies but also the Auto Owners policy and therein created an ambiguity. Technically, the other insurance clause should result in Auto Owners paying no more than a single policy limit, i.e., $100,000. However, that was irrelevant because all that the Missouri Court needed to find was an ambiguity which then permitted the Court to find stacking because stacking favored recovery for the insured.