Drivers can stack uninsured motorist protection, says South Carolina High Court – Insurance Journal | CarTailz

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A woman injured in an accident while driving a rental car provided by an auto insurer can receive uninsured motorist benefits from more than one policy, the South Carolina Supreme Court ruled Wednesday.

In a 3-2 decision, the Supreme Court ruled that an “anti-stack” clause in a policy written by State Farm Mutual Automobile Insurance Co. did not apply because language was unclear as to whether a replacement rental car was subject to the terms of the Exclusion.

“As both parties offer reasonable interpretations of political language, we believe there is an ambiguity which we construe against the author,” reads the majority opinion.

Myra Windham was involved in two accidents within six days through no fault of her own in 2012. On September 29, her Toyota Camry collided with another vehicle. The other driver’s insurer, Allstate, provided Windham with a rental vehicle while her Camry was repaired.

On October 5, a motorist ran through a stop sign and hit the rental car. The fall injured Windham’s back and led to surgery to install a spinal cord stimulator, according to her attorney.

Windham and her family owned five vehicles, each insured by State Farm with an uninsured motorist limit of $100,000. However, State Farm claimed that it could only collect from one of those policies because state law prohibits stacking of insurance benefits for accidents involving vehicles “not owned” by the policyholder.

The insurer paid Windham $100,000 but denied that anything was owed on the other four vehicles’ policies. State Farm filed a lawsuit seeking a declaratory judgment. The Lexington County Circuit Court agreed that coverage was due from only one policy.

The Court of Appeals reversed, noting that policy language clearly permitted coverage for an accident while the policyholder was driving a temporary replacement car.

The Supreme Court agreed that separate coverage was owed, but found that the Directive was far from clear on this point. It upheld the Court of Appeal’s decision, but for different reasons.

The majority opinion stated that in South Carolina a policyholder must be a Class I policyholder to stack benefits. State law permits coverage for only one vehicle if the damages result from an accident in which “the insured’s or the nominated insured’s vehicle” is not involved.

Previous cases have noted that a vehicle need not be owned by an insured person to qualify as an “insured person’s vehicle,” the report said. Drivers of, for example, leased or borrowed cars are also class I insured.

A sentence in State Farm’s policy seems to make it clear that stacking for “foreign cars” isn’t allowed. However, a separate sentence in the policy states: “If a car qualifies as both an unowned car and a temporary replacement car, it will only be considered a temporary replacement car.”

The majority said that language creates an ambiguity, because if a car is considered “only” a temporary replacement car, it cannot also be someone else’s car.

“Although one can argue that this alone makes them your own vehicles, that’s still a reasonable interpretation,” says the majority opinion. “On the one hand, temporary replacement vehicles are unowned, but on the other hand, the guidelines clearly state that they are not to be considered unowned.”


Windham’s attorney, Stephen H. Cook with Koon Cook and Walters at Columbia, said he intends to seek a jury verdict on all of the $500,000 coverage available. He said the back stimulator placed in his client’s back will need to be replaced after eight years. His client’s ability to earn income has also been negatively impacted, as employers are often reluctant to hire workers who have sustained back injuries.

Cook said the situation in Windham offers a strong case for motorists who own multiple vehicles to ensure the policy limits are the same for everyone. He said many car owners would buy lower-limit policies for vehicles their children drive. Cook said if some level of coverage is required, there’s no point in limiting potential recovery based on which vehicle is involved in an accident.

Cook said he expects State Farm to file a request for reconsideration, but he said the Supreme Court’s opinion should stand. He said if Windham was driving one of her other vehicles at the time of the accident, there was no question that she was entitled to coverage under any insurance policies given.

Judges George C. James and John Cannon Few disagreed. James wrote in a dissenting opinion that the majority ignored the fact that Windham did not own the rental car, which was clearly excluded from coverage.

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