The Pennsylvania Supreme Court has cemented a lower court's ruling that entitled insureds who previously rejected stacked auto coverage to take advantage of stacking where the insurer fails to obtain a new waiver when a car is added to the policy.

The justices denied allocatur Oct. 4 in Pergolese v. Standard Fire Insurance, letting stand a split, three-judge Superior Court panel's April ruling.

The Superior Court had determined that a family that initially chose not to stack insurance coverage for the cars they owned could still recover stacked insurance benefits because, when they added a new car to the policy several years later, the insurance carrier failed to obtain a waiver opting out of stacked coverage.

The panel said plaintiffs John and Peggy Pergolese were entitled to $500,000 of stacked coverage. The decision upheld a ruling from the Montgomery County Court of Common Pleas, which had granted summary judgment to the plaintiffs in the declaratory judgment action.

Superior Court Judge Kate Ford Elliott, writing for the majority, said no “after-acquired-vehicle clause” applied that would have removed the need for a new waiver.

Under the 2014 Superior Court case Bumbarger v. Peerless Indemnity Insurance, the addition of the new car constituted a new purchase of uninsured and underinsured motorist coverage, requiring the waiver, Elliott concluded.

“[The plaintiffs] notified their agent of the new vehicle … and requested proof of coverage before the purchase was completed. The agent then faxed a copy of the insurance card and issued amended declarations pages reflecting coverage of the new vehicle at an increased premium,” Elliott said. “As in Bumbarger, the after-acquired-vehicle provision in the Standard Fire policy is simply inapplicable.”

However, in a dissenting opinion, Judge Victor Stabile said the ruling “unnecessarily limits” the 2007 state Supreme Court decision in Sackett v. Nationwide Mutual Insurance, which, he said, stands for the proposition that vehicles added to insurance policies under an after-acquired vehicle clause does not constitute the purchase of new insurance that would require a new waiver.

“For the purposes of construing [the Motor Vehicle Financial Responsibility Law], there is no difference between adding a new vehicle to an existing policy by way of amending the declaration pages and adding a vehicle under an after-acquired vehicle clause, where both provide extension of coverage from the time of acquisition of the vehicle on a continuous basis,” Stabile said. “Neither constitutes the purchase of new insurance that requires the execution of a new waiver.”

According to Elliott, in the 1990s the Pergoleses opted out of stacked coverage at a time when they had four vehicles on the policy, including a 1993 Mazda. In 1998, the Pergoleses sought to remove a 1989 Mazda from their policy, and did not add a replacement vehicle within 30 days, which the Standard Fire policy states as the time period for replacing a vehicle.

John Pergolese called an insurance agent 44 days later requesting coverage for a 1990 Ford pickup truck that he was about to take possession of. The agent faxed a copy of the insurance card. The carrier did not request a new waiver of stacked coverage, Elliott noted.

In July 2001, John Pergolese was rear-ended by a drunk driver while driving the 1993 Mazda.

After the carrier denied stacked coverage, the Pergoleses sought a declaratory judgment on the issue, and the court granted summary judgment in their favor.

On appeal, the carrier contended that the cases Shipp v. Phoenix Insurance and Toner v. Travelers Home and Marine Insurance applied.

In the Superior Court's 2012 decision in Shipp, the court held that an insurer did not need to obtain new stacking waivers when a vehicle was added to the policy to replace another vehicle.

In Toner, a divided three-judge Superior Court panel also held that carriers do not need to provide policyholders with a new stacking waiver when an insured added vehicles to a single-vehicle policy. The state Supreme Court had agreed to take that case on appeal, but the parties settled earlier this year on the day arguments were set to take place.

Elliott, however, said the cases were distinguishable, since Shipp involved a replacement vehicle, not an additional vehicle, and Toner dealt with an interpretation of the after-acquired-vehicle clause, which Elliott previously determined had not been triggered in the Pergoleses' case.

Counsel for the Pergoleses, Scott B. Cooper of Schmidt Kramer in Harrisburg, said he believes the fact that Pergolese was allowed to stand means Bumbarger, not Toner, stands as the controlling case on the issue of whether insurers must provide a new stacking waiver each time a new vehicle is added to a policy.

Counsel for Standard Fire Insurance Co., Teresa Ficken Sachs of Marshall Dennehey Warner Coleman & Goggin in Philadelphia, also could not be reached.

Zack Needles can be contacted at 215-557-2373 or [email protected]. Follow him on Twitter @ZackNeedlesTLI.