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  • WisBar News
    February 10, 2014

    Policy Stacking Allowed for Injured Driver, Wisconsin Supreme Court Rules

    Feb. 10, 2014 – A driver who was severely injured when struck by an uninsured motorist in 2010 can “stack” his insurance policies, a unanimous Wisconsin Supreme Court has ruled while resolving a conflict with a “drive-other-car” exclusion.

    “Stacking” allows insureds with multiple cars to “stack” or “add together” multiple uninsured or underinsured motorist policies to recover damages. Currently, as of November 2011, Wisconsin allows auto policies to include “anti-stacking” provisions.

    Prior to November 2011, however, state law prohibited anti-stacking provisions, and these provisions were prohibited when Ronald Belding was struck by a drunk driver. Thus, the law allowed Belding to “stack” up to three uninsured and underinsured policies.

    At the time of the accident, state law also permitted (and currently permits) so-called “drive-other-car” exclusions. Thus, a family can have multiple auto policies for multiple vehicles.

    Under a drive-other car-exclusion, though, one policy could bar coverage for injuries sustained while an insured family member is driving “another family car.”

    Recently, the Wisconsin Supreme Court, in Belding v. State Farm Mutual Ins. Co., 2014 WI 8 (Feb. 7, 2014), clarified the apparent conflict between the “anti-stacking” law and the “drive-other-car” exclusion that applied to the Belding family situation at that time.

    What Happened?

    Belding was driving his Ford Ranger in January 2010 when another driver, Deanna Demoulin, ran a red light and crashed into Belding’s car. Belding was severely injured in the accident, but Demoulin did not have car insurance. She was uninsured.

    Belding’s Ford Ranger was covered by an uninsured motorist policy with State Farm Mutual Auto Insurance. Belding also paid premiums to cover a separate family vehicle, a Mercury Villager that was driven primarily by his wife, Antoinette Belding.

    Belding sought to recover medical expenses and other damages through his State Farm uninsured coverage. State Farm paid $100,000, the policy limit under the Ford Ranger policy. The Beldings then sought to recover excess damages under the Mercury policy.

    State Farm argued that a drive-other-car exclusion within the Mercury policy barred the Beldings from using that policy to cover injuries sustained in the Ford Ranger accident.

    The Beldings argued that the drive-other-car exclusion violated state law that, at the time, prohibited anti-stacking provisions in auto policies.

    Recently, a unanimous supreme court concluded that “State Farm cannot use the drive-other-car exclusion in the Mercury Villager policy to prevent the Beldings from stacking the uninsured motorist coverage of up to three vehicles.”

    The Court’s Decision

    The court rejected State Farm’s argument that since drive-other-car exclusions are permitted in Wisconsin, the exclusion applies and there is no further issue.

    “This argument ignores well established canons of statutory construction,” wrote Justice Ann Walsh Bradley for the unanimous court. “Where possible, statutory provisions dealing with the same subject matter should be interpreted ‘in a manner that harmonizes them in order to give each full force and effect,’” she wrote.

    The court ruled that the applicable anti-stacking law, Wis. Stat. section 632.32(6)(d), trumped section 632.32(5)(j), which permits drive-other-car-exclusions.

    “Such a construction would not render subsection (5)(j) meaningless because the drive-other-car exclusion that subsection permits would still function in other circumstances,” explained Justice Bradley, noting that stacking is only allowed in limited situations.

    That is, when Belding was injured, uninsured and underinsured policies were prohibited from including anti-stacking provisions. But the drive-other-car exclusion would still apply to other types of auto policies not involving uninsured or underinsured motorists. In addition, the drive-other-car exclusion could bar stacking beyond three policies.

    The court noted that anti-stacking laws protect drivers paying premiums on multiple policies when they are injured by uninsured or underinsured drivers. By contrast, drive-other-car exclusions generally protect insurers when insureds have multiple cars but do not pay premiums to cover all of them.

    Seesaw on Stacking

    Although Wisconsin law currently allows anti-stacking provisions, limiting the reach of the Belding decision, stacking laws have changed frequently in the last few decades.

    In the 1980s, anti-stacking provisions were prohibited, and courts upheld the anti-stacking legislation. The winds changed again in 1995, when the legislature repealed the law to allow “drive-other-car” exclusions like the one at issue in Belding.

    2009 Wisconsin Act 28 took effect in 2009, prohibiting anti-stacking provisions again. But 2011 Wisconsin Act 14 lifted that prohibition, and currently controls.  

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