RUPERT v. LIBERTY MUT. INS. CO., J-69-2001 (Pa. 10-4-2001)

MR. JUSTICE CAPPY.

The certified question asks us to resolve whether 75 Pa.C.S.A. § 1738(e) requires a valid stacking waiver to be signed by the current first named insured, or merely by the first named insured at the time the waiver is signed. The Opinion of Justice ZAPPALA determines that "the validity of a waiver of stacking uninsured motorist coverage is determined at the inception of the policy." Opin. of Zappala, J. at 2. This conclusion lacks support in the statutory language, violates the legislative goal of ensuring knowledgeable rejection of coverage, and invites troubling repercussions.

The legislature placed the burden of obtaining a valid rejection of stacked coverage on the insurance company: The rejection forms in § 1738(d) must be signed and dated by the first named insured, or else the rejection of stacked coverage is void. 75 Pa.C.S.A. § 1738(e). It is evident that the General Assembly sought to ensure that policyholders would be given full information regarding availability of stacked coverage before deciding whether or not to reject it. Cf. Salazar v. Allstate Insurance Co., 702 A.2d 1038, 1044 (Pa. 1997) (sections 1731, 1791 and 1791.1 describe information that insurer must provide "in order that the insured may make a knowing and intelligent decision on whether to waive [uninsured motorists] benefits coverage.").

The first named insured's signature on the form rejects "coverage under the policy for myself and members of my household. . . ." 75 Pa.C.S.A. § 1738(d). By employing this language, the legislature adopted the fiction of "constructive knowledge" as to all other insureds — that is, if the first named insured rejected stacked coverage, then it would be presumed that all other insureds had knowledge of the option, and acquiesced in the rejection of coverage. Thus, notice to the first named insured is all that the statute requires.

The question with which we are presented in this matter involves the effect of a valid waiver by the first named insured. The Opinion of Mr. Justice Zappala finds that the validity of a waiver of uninsured motorist coverage is determined "at the inception of the policy". Yet this language appears nowhere in section 1738. Moreover, under this expansive view, a rejection form signed "at the inception of the policy" indefinitely binds all future insureds, including those added long after the original first named insured is removed from the policy; these subsequent insureds are not even minimally afforded constructive knowledge of the option to reject stacked coverage. This troubling result does not follow if the insurer has obtained a rejection form from the current first named insured, whose signature would reject coverage for all those insureds currently on the policy. In light of the legislative goal of ensuring knowledgeable rejection of coverage, and the conclusive effect of the first named insured's signature upon other insureds, it is of paramount importance that any new first named insureds receive the notice prescribed by § 1738.

Therefore, in response to the certified question, I would hold that that 75 Pa.C.S.A. § 1738(e) requires that a valid stacking rejection form must be signed by the current first named insured.

Justice NEWMAN and Justice SAYLOR join this opinion.