Kmonk-Sullivan v. State Farm Mutual Automobile Insurance Co.; Midili v. Erie Insurance Group, 567 Pa. 514

Summary

The Supreme Court of Pennsylvania considered consolidated underinsured motorist claims arising from accidents involving Commonwealth and local government vehicles. The court held that statutory caps on governmental liability can render government vehicles underinsured under Pennsylvania's Motor Vehicle Financial Responsibility Law, and that policy exclusions for government vehicles impermissibly conflict with that law and are invalid. The court affirmed the Superior Court's decisions in favor of the insureds.

Holdings

1. A government vehicle is an underinsured motor vehicle under 75 Pa.C.S. § 1702 when statutory damage caps make the available governmental self-insurance insufficient to pay the insured's losses. The statute does not restrict the circumstances or reasons producing the insufficiency.
2. An automobile insurance policy exclusion that removes government vehicles from the definition of an underinsured motor vehicle is contrary to the MVFRL, invalid, and ineffective.

Questions Presented

1. Whether a government vehicle may qualify as an underinsured motor vehicle under Pennsylvania's Motor Vehicle Financial Responsibility Law when statutory sovereign-immunity or governmental-immunity damage caps leave the available self-insurance insufficient to pay the insured's losses.
2. Whether automobile insurance policy provisions excluding government vehicles from the definition of an underinsured motor vehicle conflict with the MVFRL requirement that insurers offer underinsured-motorist coverage.
3. Whether the insureds were legally entitled to recover damages for purposes of 75 Pa.C.S. § 1731(c), notwithstanding the statutory limits on governmental liability.

Disposition

affirmed