Insurance Coverage and Bad Faith

First DCA Holds Father’s Selection of Non-Stacking UM Coverage Was Not Binding On Daughter

First DCA Holds Father’s Selection of Non-Stacking UM Coverage Was Not Binding On Daughter

 In Horace Mann Ins. Co. v. Allison Chase, et. al, . Case No. 1D12-32132; 2013 WL 5354426 (Fla. 1st DCA September 26, 2013), the First District Court of Appeal held that a father’s selection of non-stacking UM coverage was not binding on his daughter. The daughter had taken over the policy from her father before the date of the accident.

In so doing, the First District re-affirmed its decision in Travelers Commercial Insurance Co. v. Harrington, 86 So. 3d 1274 (Fla. 1st DCA 2012). In Harrington, the First District held that a mother’s selection of non-stacking coverage did not apply to her daughter’s UM claim. In reaching that decision, the First District focused on the difference in language between 627.727(1) which addresses the rejection of UM coverage, with the language of subsection (9), which addresses the selection of non-stacking coverage.

In our view, the Harrington court misconstrued the language of subsection (9) which allows a named insured to make the selection of limitations applicable to the policy. Once the policy is issued with the limitations agreed upon by a named insured, there should be no basis to differentiate between insureds seeking recovery under the policy. The incongruent result in Harrington is that an additional insured would recover more benefits than the policyholder.

In response to the Harrington decision, the Florida Legislature amended subsection (9), to re-state legislative intent that a named insured’s selection of non-stacking coverage is binding on all insureds. In our view, the Staff Analysis to the amendment spells out that the amendment was a clarification of existing law, rather than a substantive change, stating:

This bill restores the general effectiveness of a “non-stacking” waiver for UM coverage whereby the person buying the coverage makes an election between stacking or non-stacking coverage that is binding on the family. The result would return current insurance law to the status quo that existed before the court decision and clarify, for both insurers and insureds, the true extent of coverage offered by UM policies.

See House of Representatives Staff Analysis, CS/HB 341, Mar. 15, 2013.  As a result, the amendment should be applicable to cases in existence at the time of the amendment. Nevertheless, the Chase court did not discuss the statutory amendment and reaffirmed its decision in Harrington. Harrington is currently pending before the Florida Supreme Court.  Briefing is complete, but oral argument has not yet been scheduled.