UIM/UM STACKING: ADKINS V. KENTUCKY NATIONAL INS. CO. (COA 4/6/2007)

ADKINS V. KENTUCKY NATIONAL INS. CO.
INSURANCE:  Stacking of UM/UIM coverages; single premium actuarially based
2005-CA-002213
PUBLISHED: AFFIRMING (STUMBO)
DATE RENDERED: 4/6/2007

In this appeal, Adkins argued that Kentucky National improperly sought to unilaterally amend an insurance contract for the purpose of preventing Adkins from stacking three units of UM (uninsured motorist benefits) coverage.

Adkins had been paying three separate premiums for UM coverage for three vehicles, representing one unit of coverage per vehicle. Under that situation, the three policies would have been stacked for insureds of the first class (eg., the Adkins).  However, 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 Adkins began paying premiums according to these new terms. However, Adkins now argues that he was not given notice of Kentucky National’s intention to change the terms of coverage and he never consented to the policy change.

The Court of Appeals disagreed noting the changes were mailed and a new "dec" page and policy were issued.  Even though Adkins further claimed he was not told of the ramifications of this policy change, the notices were unambiguous.

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.

Since SCOKY has treated the application of underinsured motorist benefits coverage (UIM) the same as UM coverage, COA relied upon a SCOKY decision and held 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.  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.

Digested by Michael Stevens.  See also, analysis by Ed Brutscher at No Stacking UM When Single Premium Charged for Multiple Vehicles! @ Kentucky Tort and Ins. Law Blog.

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