Geico’s refusal to fully cover a motorcyclist’s underinsured motorist claim violated Pennsylvania law, the state Supreme Court ruled Wednesday. The high court’s decision nullifies hidden clauses in insurance policies that attempt to evade paying “stacked” coverage for all of a household’s vehicles unless the customer explicitly chooses to decline the more generous coverage.
Brian Gallagher had turned to Geico to insure his motorcycle and two family automobiles. Geico decided to treat the motorcycle as an entirely separate policy, and in so doing provided one-fifth the benefits when Gallagher filed a claim after he was seriously injured on August 22, 2012. A pickup truck had run a stop sign and slammed into Gallagher while he was riding. Gallagher’s medical bills quickly exceeded the limits of the pickup driver’s Progressive insurance policy, so Gallagher filed for underinsured benefits from Geico.