Class Action Claims Liberty Mutual, Affiliates Unlawfully Prohibit Policy Stacking of Uninsured Motorist Coverage

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A proposed class action alleges Liberty Mutual and a host of other insurers under its management have unlawfully deprived Arizona insureds of the right to “stack” benefits in connection with uninsured and underinsured motorist (UM/UIM) vehicle accident claims.

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The 24-page lawsuit contends that Liberty Mutual and its affiliates have failed to properly inform customers of their right to “stack” policies or coverages for UM/UIM accident claims. Under Arizona law, if a consumer has policies for several vehicles, an auto insurer must allow them to stack the coverages—that is, add up each coverage limit to be used for a single claim—unless the insurance company fulfills two requirements, the suit explains.

First, an auto insurer who wishes to prohibit stacking must include in a consumer’s policy “clear and unambiguous language” barring the practice, the case says. Second, the company must inform the insured of their right to select which coverage to apply to a claim by either including such a disclosure in their policy or providing them with written notice within 30 days of the insurer being advised of the accident, the complaint relays.

The filing alleges that Liberty Mutual and its affiliates have failed to satisfy either requirement when handling the UM/UIM claims of insureds with multiple covered vehicles, in violation of Arizona law. Therefore, the companies must allow customers to stack their UM/UIM coverages when making a qualifying claim, the lawsuit argues.

The plaintiff, an Arizona resident, asserts that Liberty Mutual applied only a single UM/UIM coverage limit to an accident claim he filed in October 2016 even though he has three vehicles covered by the insurer.

The man charges that his Liberty Mutual policy contained none of the requisite disclosures, and the company did not send notice of his right to select a coverage to apply to his claim within the 30-day period, the lawsuit says.

As such, the suit contends that the insurer has denied the plaintiff benefits he was entitled to under his policy and state law.

“Having failed to qualify for the anti-stacking opportunity permitted by law, failed to disclose the existence of stacked coverages to its insureds, and failed to notify the insured of his right to select, defendant [Liberty Mutual] General Insurance Company breached its contractual and legal duties to its customers, including underpaying the benefits due,” the case alleges.

The lawsuit looks to represent anyone who, since January 1, 2006, was insured under at least one policy covering multiple vehicles issued in Arizona by any of the defendants and experienced a covered loss where the insured received UM/UIM benefits that were either restricted to the limits of coverage of a single vehicle or reduced due to apportionment among multiple claimants, with the collective claim limited to the coverage of one vehicle.

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