Vol. 9, No. 6, Pg. 20. Stacking Of Liability Coverage: Unstacked.

• Author: By Gerald M. Finkel

South Carolina Lawyer

1998.

Vol. 9, No. 6, Pg. 20.

Stacking Of Liability Coverage: Unstacked

20Stacking Of Liability Coverage: UnstackedBy Gerald M. FinkelOn September 14, 1990, Sonja Ruppe was killed in a head-on automobile collision when another vehicle entered Interstate 85 in the wrong direction.

The driver of that vehicle and her husband owned two cars, both of which were covered for liability insurance by Auto-Owners Insurance under a combined liability policy. In its claim, Ruppe's estate sought to stack the liability coverage, but was met with resistance by the insurer.

Arguing that a "Limit of Liability" provision in the policy prevented intra-policy stacking, the carrier rejected the estate's claim and instead paid coverage under only one vehicle ($100,000). Not

21satisfied, the estate instituted a declaratory judgment action to determine the applicable limits of coverage. The trial court ruled that the liability coverage could be stacked. Auto-Owners appealed.

In Ruppe v. Auto-Owners Ins., 323 S.C. 425, 475 S.E.2d 771 (Ct. App. 1996), the South Carolina Court of Appeals affirmed, with some modification, the ruling of the trial court. The court began its analysis by stating that "stacking is generally permitted unless limited by statute or by a valid policy provision." Id. at 428, 774.

However, "a policy provision attempting to limit stacking of statutorily-required coverage is invalid; and liability insurance is statutorily-required." Id. (referring to S.C. Code Ann. § 38 -77-140 (1989)). In this regard, intra-policy stacking is permissible where "coverage on each vehicle in a multiple vehicle coverage policy is treated as a 'theoretical separatepolicy."' Id. (quoting Thompson v. Continental Ins. Co., 291 S.C. 47, 351 S.E.2d 904 (Ct. App. 1986)).

The court concluded that the coverages were indeed two theoretically separate policies because the cars were not identical, separate premiums were paid for each and only one vehicle was listed on each declaration. The court held that the insurer was precluded from "restricting the stacking of liability coverages in a single policy covering multiple vehicles as to sums required to be provided by statute." Id. at 429, 775.

The court stopped short, however, of awarding plaintiffs an additional $100,000. Noting that S.C. Code Ann. § 38-77-140 only requires liability coverage...