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The Rhode Island Supreme Court ruled that a statute that allows stacking of underinsured motorist benefits for policies issued by “the same insurance company” does not apply where policies are issued by insurance companies owned by the same parent company.  Progressive Cas. Ins. Co. v. Dias, 2017 WL 66148 (R.I. Jan. 6, 2017).

Dias was involved in an accident while riding a motorcycle.  He settled his personal injury claim against the tortfeasor’s automobile insurer.  Because that settlement did not fully compensate his injuries, Dias subsequently filed and settled an uninsured-motorist claim against Progressive Northern, which covered the motorcycle.  Seeking additional coverage, Dias also filed suit against Progressive Casualty, which insured the automobiles owned by Dias and his wife.  Progressive Casualty denied coverage based on an “owned-but-not-insured” clause.  Dias did not contest the applicability of the provision, but argued that it was preempted by R.I. Gen. Laws. §27-7-2.1(i).  Section 27-7-2.1(i) states that when an insured has multiple uninsured/underinsured policies “with the same insurance company, the insured shall be permitted to collect up to the aggregate amount of coverage for all the vehicles insured, regardless of any language in the policy to the contrary.”  Dias contended that this provision entitles him to stack the limits of the Progressive Northern and Progressive Casualty policies.  The court disagreed.

The court ruled that Progressive Northern and Progressive Casualty are not “the same insurance company,” although both companies are wholly-owned subsidiaries of the same parent (The Progressive Corporation).  Dias argued that stacking should nonetheless be permitted based on the reasonable expectations doctrine.  He argued that a policyholder would reasonably believe that the two insurers are the same company based on the following facts:  they use the same claims manual, they advertise under the same Progressive brand, they employ some of the same individuals, and they list the same telephone number and website on their policies.  Rejecting this argument, the court explained that the reasonable expectations doctrine applies only to interpreting insurance policies, not to statutory language.  In any event, the court concluded that the phrase “the same insurance company” is clear and unambiguous.