No Stacking UM When Single Premium Charged for Multiple Vehicles!

April 11, 2007

In Adkins v. Kentucky National Ins. Co. the plaintiff (Adkins) appealed from a summary judgment. Specifically, he argued that Kentucky National improperly sought to unilaterally amend an insurance contract for the purpose of preventing Adkins from stacking three units of UM coverage.

The Adkins family (Adkinses) paid three separate premiums for UM coverage for three vehicles, representing one unit of coverage per vehicle. Kentucky National mailed renewal materials, which stated that it would begin charging a single UM premium for the three units of coverage on the three vehicles. The Adkinses accepted the new coverage and began paying premiums according to its terms. Adkins’ argued that he was not given notice of Kentucky National’s intention to change the terms of coverage and that the Adkinses never consented to the policy change.

The Court of Appeals found that this argument was refuted by the record, which contained the notification of change in coverage mailed to the Adkinses as well as the “new” policy declaration. Adkins’ real argument was that the Adkinses were not told of the ramifications of that change. However, this too, was refuted by the record, which showed that the notice contained unambiguous language detailing the affect of the change. HOWEVER,

More important than the notice issue was this underlying question of whether UM coverage may be stacked where a single UM premium is charged for multiple vehicles, and where the premium is not based on the number of vehicles covered. The Adkins’ Court answered in the negative, stating:

[T]he Kentucky Supreme Court held that an insured had no reasonable expectation of aggregate or stacked UIM coverage if a single premium is paid for two or more units of coverage, where the premium is not based on the number of vehicles covered… Because there is no rational distinction between UM and UIM coverage for purposes of aggregation or stacking, and because Marcum resolves single premium UIM coverage in favor of the insurer, we therefore hold that an insurer is not required to stack multiple units of UM coverage which have been paid by a single premium, if that premium is not based on the number of vehicles insured. As in Marcum, we base this conclusion on our recognition that an insured has no reasonable expectation of stacking where he or she pays a single premium which does not vary based on the number of vehicles insured. (citations omitted).

The purpose of insurance is to provide for the insured in the event a condition covered in the policy comes to pass. Don’t wait until the death of a loved one killed by a negligent uninsured driver to start reading your policy and questioning the amounts you have in coverage. While economics certainly comes into play, you simply are not entitled to more coverage than that for which you bargained. The decrease in premiums, while certainly welcome to most, is not a gift, but usually an indicator that your coverage has changed, and most likely, not for the better.

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