Are You Protected Riding Your Motorcycle?

When purchasing insurance for your motorcycle make sure you protect yourself with the appropriate coverages!

The issue addressed by the Eichelman Court was whether a person who has “voluntarily elected to forego underinsured motorist coverage on his own vehicle is precluded from recovering underinsured motorist benefits from separate automobile insurance policies issued to family members with whom he resides as a result of a “household exclusion” clause excluding underinsured motorist coverage for bodily suffered while occupying a motor vehicle not insured for underinsured motorist coverage. Because we hold both that this “household exclusion” language precludes the recovery of underinsured motorist benefits under the facts of the case and that this exclusionary language is not against public policy, we affirm the order of the Superior Court.  Eichelman v. Nationwide Ins. Co., 551 Pa. 558, 560 (1998).

In Eichelman, the injured insured had waived UIM coverage in his motorcycle policy. 711 A.2d at 1007. He was struck by an underinsured driver while occupying his motorcycle, so the injured insured sought UIM coverage under his resident relatives' policies covering household automobiles, both issued by Nationwide. Id. Nationwide denied the injured insured's claim, citing the automobile policies' household vehicle exclusions. The exclusions provided that UIM coverage would not apply to “[b]odily injury suffered while occupying a motor vehicle owned by you or a relative not insured for [UIM] coverage under this policy; nor to bodily injury from being hit by any such motor vehicle.” Id.The Eichelman Court unanimously held that the household exclusions were enforceable notwithstanding the insured's election of stacking, concluding that:

"[a] person who has voluntarily elected not to carry [UIM] coverage on his own vehicle is not entitled to recover [UIM] benefits from separate   insurance policies issued to family members with whom he resides where clear and unambiguous “household exclusion” language explicitly   precludes [UIM] coverage for bodily injury suffered while occupying a motor vehicle not insured for [UIM] coverage. Id. at 1010."

The Eichelman Court also noted that the cost-containment rationale underlying the MVFRL weighed in favor of enforcing the household vehicle exclusions. Id.

Similarly, in Mione, the insured waived UIM coverage on his motorcycle policy but paid for stacked UIM coverage on at least one of two other automobile policies. 289 A.3d at 525–26. The insured was injured on his motorcycle and attempted to recover UIM benefits under both the household automobile policies. Id. at 526. The insurer refused to pay out, citing the household exclusions contained in both automobile policies; the coverage did not apply to “damages sustained by anyone we protect while occupying or being struck by a motor vehicle owned or leased by you or a relative, but not insured for [UM/UIM] Coverage under this policy.” Id. at 526, 526 n.4.

The Mione Court distinguished the facts before it from those in Gallagher, noting that the insured could not stack coverage, as he had waived UIM benefits under the host-vehicle policy and, instead, was seeking UIM benefits under the other household automobile policies “in the first instance.” Id. at 529. The household vehicle exclusions in those automobile policies were held enforceable because they excluded coverage for injuries sustained when the insured was operating a motorcycle not insured for UIM coverage. Id. at 530. Citing practical concerns, the Mione Court feared that a broad conclusion that all household vehicle exclusions were unenforceable “would allow an entire family living in a single household ... to obtain underinsured motorist coverage for each family member through a single insurance policy on one of the automobiles in the household.” Id. at 527 (quoting Eichelman, 711 A.2d at 1010).

The Supreme Court in Mione clearly stated that policies that “explicitly exclude ... UIM coverage for damages sustained while operating an unlisted household vehicle ... do not conflict with Section 1738 of the MVFRL.” Id. at 530. The Mione Court continued:

"when an insured seeks ... UIM benefits under a household policy but does not have ... UIM coverage on the vehicle that he or she was    occupying at the time of the collision, it cannot be said that a household vehicle exclusion in the ... UIM-containing policy is operating as a sort     of disguised waiver of stacking that was disapproved in Gallagher. Rather in such circumstances, the household vehicle exclusion serves as an    unambiguous preclusion of all ... UIM coverage (even unstacked coverage) for damages sustained while operating an unlisted household     vehicle." Id. (emphasis added). 

Thus, when the host vehicle is uninsured, UIM coverage that may have existed under a second-priority policy can properly be excluded. Mid-Century Ins. Co. v. Werley, 114 F.4th 200, 209–10 (3d Cir. 2024).