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For years, insurers have wrestled with statutory pre-requisites found in NRS 687B.145(1) in devising ways to eliminate stacking of uninsured/ underinsured motorist coverage in multiple vehicle policies. In a case of first impression relating to that provision, the Nevada Supreme Court has stated an insurer may validly incorporate an anti-stacking method into its policy that restricts an insured’s recovery to the limit designated on the policy for the vehicle involved in the accident. In this case, the Nationwide policy holder had insured two vehicles with different limits of coverage, one vehicle carrying limits of 100/300 and the other vehicle carrying limits of 50/100. The insured’s children were involved in a serious accident with an underinsured motorist and sought to stack the two separate limits for a recovery of $150,000.00 per child. Nationwide paid limits on the vehicle involved in the accident, refused to pay anything more and a lawsuit ensued which contained, in part, a cause for declaratory relief that Nationwide must stack the coverages under the policy. By stipulation, the parties limited discovery to the stacking issue. A Nationwide actuary was deposed and gave testimony that the insured purchased separate coverage for distinct risks on each vehicle, with corresponding different premiums charged for each vehicle. The difference in premium was approximately $6.00 between the two vehicles. The Court first examined the requirements of NRS 687B.145(1) and the policy. The statutory requirements are that the limiting provision must be expressed in clear language, it must be prominently displayed in the policy binder or endorsement and the insured must not have purchased separate coverage on the same risk nor paid a premium calculated for full reimbursement under that coverage. In examining the policy, the Court noted that the anti-stacking provisions were enclosed in a box, setting them off from the remainder of the policy, and provided, in pertinent part, that if an insured is in an accident in a listed auto, Nationwide would not pay more than the limit of coverage for that particular auto. The policy also stated that the limit of coverage would apply regardless of the number of policies, insureds, autos, claims made or motor vehicles involved in the accident and that coverages on other motor vehicles insured by them could not be added or stacked to the coverage of the auto that covers the loss. The District Court found this clause void, concluding that it was ambiguous as to whether the coverage was limited to the highest coverage on a single vehicle and also that it failed to specify the limitation applied regardless of the number of premiums paid. The lower Court relied, upon Torres v. Farmers Insurance Exchange, 106 Nev. 340, 793 P.2d 839 (1990) as the carrier in that case did not attempt to limit recovery to the insured vehicle involved in the accident. The Supreme Court noted that it would be impossible for an insurer to be expected to award an insured a higher policy limit on a single vehicle when it has validly restricted recovery to the limit on the vehicle involved in the accident. The Court found that the language incorporated in the Nationwide policy was clear, unambiguous and that it was prominently set forth in the policy, giving the insured adequate notice of its content and effect. The Supreme Court concluded that an insurer may validly incorporate either highest coverage language or single vehicle limit language into policies and that either one would be enforceable if it otherwise complied with the statutory requirements. In addressing the third arm of the statute, the insureds contended Nationwide charged them a double premium on the same risk for both autos. Since the actuary’s testimony was not refuted, and since that testimony stated the insurer calculated each auto’s premium to reflect different risks and corresponding coverage amounts on each vehicle and since separate premiums were paid for each risk, the Supreme Court also rejected that argument. A caveat appears in a footnote to the opinion. If, in a multi-vehicle policy, the Nationwide policy language is used, (restricting coverage to the limits contained for specific vehicles) and an insured is injured as a passenger in a third parties vehicle or uninsured vehicle that he or she owns, the footnote indicates any anti-stacking clause limiting recovery to the limit on the insured vehicle involved in the accident would necessarily be inapplicable. This footnote seems to suggest that this method of anti-stacking language may subject a carrier to stacking in third party or unlisted vehicle situations.
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