Opinion
C.A. NO. 03-5929.
May 10, 2004
MEMORANDUM OPINION AND ORDER
The plaintiff brought this declaratory judgment action, seeking a declaration that it does not have to provide underinsured motorist coverage to the defendants. Presently before the court are the parties cross-motions for summary judgment. For the reasons which follow, the motion of the plaintiff will be granted and the motion of the defendants will be denied.
The material facts are not in dispute. Plaintiff issued to defendants a policy of insurance which covered two automobiles. The defendants also purchased $35,000 in underinsured motorist ("UIM") coverage on the two automobiles. Defendant Russell Roberts, III was injured while occupying a 1999 BMW motorcycle which he owned. However, the motorcycle was not insured with plaintiff, but with a different insurance company. The defendants maintained $15,000 in UIM coverage on the motorcycle. Defendants received the liability limits from the tortfeasor's policy in the amount of $50,000 as well as the $15,000 in UIM coverage. Defendants made a claim for UIM benefits with plaintiff, but the claim was denied.
Plaintiff contends that defendants are not entitled to UIM coverage for the accident involving the motorcycle under exclusion (A)(1) of the Policy, commonly known as the "Household Exclusion". That exclusion provides:
A. We do not provide Underinsured Motorists Coverage for bodily injury sustained:
1. By you while occupying, or when struck by, any motor vehicle you own which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle. . . .
See Exhibit A of Defendants' Motion for Summary Judgment. (emphasis in original).
Defendants do not dispute the application of the exclusion to the facts of this case, but contend that the exclusion is void as a matter of law in that it contradicts the specific provision of the Pennsylvania Motor Vehicle Financial Responsibility Law which governs priorities of recovery of underinsured motorist benefits, 75 Pa.C.S.A. section 1733. That provision states, in pertinent part:
(a) General rule.-Where multiple policies apply, payment shall be made in the following order of priority:
(1) A policy covering a motor vehicle occupied by the injured person at the time of the accident.
(2) A policy covering a motor vehicle not involved in the accident with respect to which the injured person is an insured.
(b) Multiple sources of equal priority. — The insurer against whom a claim is asserted first under the priorities set forth in subsection (a) shall process and pay the claim as if wholly responsible. The insurer is thereafter entitled to recover contribution pro rata from any other insurer for the benefits paid and the costs of processing the claim. 75 Pa.C.S.A. section 1733(a) and (b).
Defendants overlook the fact that section 1733 is only applicable where multiple policies apply. Here, because of the household exclusion, plaintiff's policy does not apply and therefore multiple policies do not apply. Because multiple policies do not apply, section 1733 is not implicated. See Burstein v. Prudential Prop. Cas, Ins. Co., 809 A.2d 204, 209 n. 7 (Pa. 2002) ("While Section 1733 contemplates that UM and UIM coverage may be portable in some instances, it does not suggest that UM or UIM coverage would extend where the coverage has been specifically excluded, as is the case here"); Prudential Property v. Colbert, 813 A.2d 747, 751 (Pa. 2002) (rejecting the insured's argument that section 1733 evinces an intent by the Legislature that an individual may receive benefits under a policy of insurance covering a vehicle other than the one involved in the accident, so long as he is a paid insured under the secondary policy, citing the language in Burtein supra);Rudloff v. Nationwide Mut. Ins. Co., 806 A.2d 1270, 1277 (Pa.Super. 2002), appeal denied by 818 A.2d 505 (Pa. 2003).
Numerous cases have held that similar household exclusions preclude coverage where, as here, an insured is injured while operating a motorcycle he owns but insures with a different insurer for lesser or no UIM coverage. See Nationwide Mut. Ins. Co. v. Hampton, 935 F.2d 578 (3d Cir. 1991) (holding that household exclusion precluded claimant who was injured while operating his motorcycle from recovering UIM benefits under his father's personal automobile policy); Liberty Mutual Insurance Co. v. Wark, 2000 U.S. Dist. LEXIS 15175 (E.D.Pa. 2000) (holding that household exclusion was not void as against public policy where defendant wads involved in an accident while operating a motorcycle he owned and insured through a different insurer); Nationwide Insurance Co. v. Ridder, 2000 U.S.Dist. LEXIS 10244 (E.D.Pa. 2000) (holding that the household exclusion was valid and enforceable and precluded an insured injured while operating his motorcycle from recovering UM benefits under a separate policy which insured two other motor automobiles).
Indeed, the whole purpose behind the exclusion is to discourage an owner of a motorcycle from scrimping on purchase of UIM coverage, because he can fall back on the UIM coverage he purchased under a separate policy for his automobile. It would be quite against the public policy of the Commonwealth of Pennsylvania to require an insurer to underwrite a risk for a high risk vehicle such as a motorcycle for which it neither contracted nor received comparable premiums from the insured.See, Old Guard, Inc. v. Houck, 801 A.2d 559, 568 (Pa.Super 2002) (were we to accept the insured's argument, "a party could purchase a minimal amount of UIM coverage for a motorcycle from one insurer and purchase a much higher amount of UIM coverage for an automobile from another insurer, and yet still collect UIM benefits from the latter when the former's benefits prove inadequate").
As coverage is precluded by the "household exclusion" clause, and the household exclusion does not conflict with 75 Pa.C.S. section 1733 as stated by the Supreme Court of Pennsylvania inBurstein and Colbert, the plaintiff is not obligated to provide UIM coverage to the defendants.
The motion of the plaintiff for summary judgment is GRANTED.
Judgment is ENTERED in favor of the plaintiff and against the defendants.
The Court declares that plaintiff is not obligated to provide UIM coverage to the defendants for the accident of April 6, 2003 as Exclusion (A)(1) of the UIM endorsement written on form PA0417(12-98) of policy number APV8577394 precludes coverage under the circumstances of this case.
IT IS SO ORDERED.