Davis Adv. Sh. No. 6
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Wayne M. and Betty
Wayne Ruppe as
Representative of the
Estate of Sonja K.
ON WRIT OF CERTIORARI TO THE COURT OF
Appeal From Richland County
Frank P. McGowan, Jr., Judge
Opinion No. 24761
Heard December 4, 1997 - Filed February 9, 1998
MOORE, A.J.: We granted a writ of certiorari to review the
Court of Appeals' decision holding stacking of liability coverage cannot be
validly prohibited by contract where the owner's vehicles are insured
under a single policy.1 We reverse.
Sonja Ruppe was killed when her car was struck head on by a car
owned and driven by Linda Bagwell. The Bagwells insured two cars
under a single policy with respondent/petitioner (Auto-Owners). Each
car had liability coverage of $100,000. Auto-Owners paid petitioners/
respondents (the Ruppes) $100,000 in liability coverage applicable to the
car involved in the collision. The Ruppes then commenced this declaratory
judgment action claiming they were entitled to stack an additional
$100,000 liability coverage from the Bagwells' other insured vehicle.
Despite a provision in the policy prohibiting stacking, the trial judge
held the Ruppes were entitled to stack an additional $100,000 in liability
coverage. The Court of Appeals affirmed but modified the amount stacked.
Auto-Owners contends the Court of Appeals erred in allowing
stacking of liability coverage in the face of the policy provision prohibiting
it. We agree.
Generally, stacking of additional coverage for which the insured has
contracted is permitted unless limited by statute or a valid policy
provision. Jackson v. State Farm Mut. Auto. Ins. Co., 288 S.C. 335, 342
S.E.2d 603 (1986). In Giles v. Whitaker, 297 S.C. 267, 376 S.E.2d 278
(1989), we held a policy provision prohibiting stacking of liability insurance
was valid and stacking was not permitted.2
2See also Thompson v. Continental Ins. Co., 291 S.C. 47, 351 S.E.2d 904
(Ct. App. 1986) (disallowing stacking of liability coverages provided under a
single policy where the policy prohibited it).
Giles is precisely on point in this case.3 Further, Giles is consistent
with the majority rule that a policy provision limiting stacking of liability
coverage is valid. See, e.g., Gibbons v. Shockley, 341 So.2d 260 (Fla. Dist.
App. 1977); Georgia Farm Bureau Mut. Ins. Co. v. Shook, 215 Ga. App.
66, 449 S.E.2d 658 (1994); Butler v. Robinette, 614 S.W.2d 944 (Ky. 1981);
Oarr v. Gov't Emp. Ins. Co., 39 Md. App. 122, 383 A.2d 1112 (1978).
The Ruppes contend, however, that a policy provision purporting to
limit stacking of statutorily required coverage is invalid. Statutorily
required coverage is that which is required to be offered or provided.
Brown v. Continental Ins. Co., 315 S.C. 393, 434 S.E.2d 270 (1993). Since
liability insurance is required under S.C. Code Ann. § 38-77-140 (1989),
the Ruppes argue stacking of liability coverage cannot be limited by a
Dicta in Jackson, supra, states the rule that stacking of statutorily
required coverage cannot be contractually prohibited.4 A review of current
stacking cases, however, indicates this statement is an oversimplification
of our stacking law and we decline to apply it here.
First, stacking of uninsured and underinsured coverages, which are
both statutorily required coverages, is governed specifically by statute.
See S.C. Code Ann. § 38-77-160 (Supp. 1996). Construing specific
and was involved in a wreck. The injured party sought to stack the liability
coverage from each of the insured's three policies. The Court of Appeals
found Giles distinguishable in this case because Giles involved more than one
policy. This ruling is incorrect. Stacking does not depend upon the number
of policies issued but rather the number of additional coverages for which the
insured has contracted. Esler v. United Servs. Auto. Ass'n, 273 S.C. 259, 255
S.E.2d 676 (1979).
4Jackson cites Belk v. Nationwide Mut. Ins. Co., 271 S.C. 24, 244
S.E.2d 744 (1978), for this proposition. Belk involved stacking of personal
injury protection coverage, a type of coverage that at the time was statutorily
required. To the extent Belk may be read to stand for the proposition cited
in Jackson, it is hereby overruled.
statutory language,5 we have held an insured is entitled to stack
underinsured or uninsured coverage in an amount no greater than the
amount of coverage on the vehicle involved in the accident. S.C. Farm
Bureau Mut. Ins. Co. v. Mooneyham, 304 S.C. 442, 405 LS.E.2d 396 (1991).
To this extent, stacking cannot be contractually prohibited. Nationwide
Mut. Ins. Co. v. Howard, 288 S.C. 5, 339 S.E.2d 501 (1985). Where none of
the insured's vehicles is involved in the wreck, however, stacking of
underinsured or uninsured coverage may be prohibited. Brown, supra.
Stacking of non-owned liability coverage6 is controlled by our decision
in Jackson, supra. In Jackson, we held stacking of this type coverage may
be prohibited by contract because it is not statutorily required coverage.7
This holding is supported by the rationale that the parties are free to
choose their terms regarding voluntary coverage that is not governed by
6Non-owned liability insurance protects an at-fault insured while driving
someone else's vehicle whereas liability coverage protects an at-fault insured
while driving a particular vehicle owned by the insured.
7From our holding in Jackson it does not follow conversely that stacking
of any coverage that is statutorily required cannot be prohibited by contract.
statute. Willis v. Fidelity & Cas. Co., 253 S.C. 91, 169 S.E.2d 282 (1969).8
The guiding principle to be gleaned from our current stacking law is
that stacking may be prohibited by contract if such a prohibition is
consistent with statutory insurance requirements.
In this case, we look to § 38-77-140 which mandates liability
insurance in this State. This section requires coverage under a policy
issued to the owner of a motor vehicle for liability arising out of the
ownership, maintenance, or use of that motor vehicle. Liability coverage,
therefore, while statutorily required, is limited to the particular vehicle
for which it is purchased. The extent of liability coverage is thus
statutorily defined by the amount of coverage on the insured vehicle and
does not encompass coverage applicable to other vehicles.9 Accordingly, a
policy provision prohibiting stacking is consistent with statutory insurance
requirements regarding liability coverage.
We reaffirm Giles and hold the policy provision prohibiting
stacking of liability coverage is valid. In light of this disposition, we need
not address the issue raised by the Ruppes regarding the amount of
FINNEY, C.J., TOAL, WALLER and BURNETT, JJ., concur.
437 S.E.2d 43 (1993) (insurance companies may prohibit stacking of non-
9Accord First Nat'l Ins. Co. v. Clark, 899 S.W.2d 520 (Mo. 1995)
(upholding validity of a policy provision prohibiting stacking of liability
coverage because liability insurance relates to the use and operation of a
particularly described motor vehicle).