North Carolina Supreme Court Overturns Decision Allowing Stacking of UIM Coverage for Vehicle Owners in At-Fault Accidents

The North Carolina Supreme Court issued a pivotal ruling affecting underinsured motorist (UIM) insurance claims in the state. The court reviewed the case of North Carolina Farm Bureau Mutual Insurance Company Inc. v. Matthew Bryan Hebert, focusing on whether a vehicle owner, who is also the insured, can combine (or "stack") UIM coverage limits from multiple policies for a claim involving their own vehicle in an at-fault accident.

At the heart of this case was an incident in 2020 involving Hebert’s car, driven by a third party, which resulted in fatalities and significant injuries, including to Hebert himself. Hebert sought to leverage UIM coverage from both his own policy and his parents’ policy (both issued by the plaintiff, North Carolina Farm Bureau Mutual Insurance Company) to claim his vehicle as underinsured.

The Supreme Court reversed the Court of Appeals’ decision that had allowed such stacking of UIM coverages. It clarified that according to subdivision 20-279.21(b)(4) of the Motor Vehicle Safety and Financial Responsibility Act of 1953, only UIM limits "for the vehicle involved in the accident and insured under the owner’s policy" are relevant at the "activation stage" of determining if a vehicle is underinsured. The Court ruled that Hebert’s attempt to combine UIM limits from policies not insuring the accident-involved vehicle contradicted the statute’s clear language.

This ruling emphasizes the court’s interpretation of statutory language over broader principles of ensuring maximal recovery for insured individuals. It delineates the boundaries of UIM coverage activation, specifically excluding the practice of inter-policy stacking when it involves the policyholder’s own vehicle in at-fault accidents.