Wisconsin High Court Allows Stacking of Auto Insurance Policies

Wisconsin case law summary by Attorney Richard Clem: insurance stacking, Wis. Stat. 632.32(6)(d).

Ronald E. Belding, Jr. and Antoinette Belding v. Deeanna L. Demoulin. Wisconsin insurance stacking, Wis. Stat. 632.32(6)(d)

For decades, courts and legislatures have grappled with the seemingly easy question of "stacking" of insurance policies. But for decades, they have found that that seemingly easy question has many twists that need to be sorted out. The latest court to be faced with this issue was the Wisconsin Supreme Court.

"Stacking" comes into play when a driver has more than one insurance policy, such as is the case when they own more than one car. If the coverage is insufficient under the policy of the car they were driving, the question becomes whether the coverage under the other polcy can be "stacked". In other words, the question is whether the insured person gets extra coverage because they have two policies.

Wisconsin, like many states, has a statute governing the subject. Wis. Stat. 632.32(6)(d) prohibits anti-stacking provisions in car insurance policies. In other words, a Wisconsin insurance company must stack the policies. However, the twist in this case was the interpretation of the "drive other car" provision of the policy. The insurance policy in the case, like most policies, contained a provision that the insured did not have other coverage when driving another car owned by them.

The Supreme Court pointed out that the purpose of this provision is to prevent "free riders". For example, if someone owned two cars, they could insure one of them, but not the other. Generally, an insured driver is insured if they are driving another car. But the policy has an exclusion stating that this does not apply to other cars owned by the driver. The exclusion prevents a driver from getting free coverage by insuring only one car. They're still insured if they borrow a friend's car and drive it. But if they drive another car owned by them, then they need to buy insurance on the second car, since the "drive other car" provision prevents coverage.

In this case, the driver was involved in an accident, and the other driver was not insured. The driver was injured, and they were covered for these injuries under the uninsured motorist coverage of their own policy. But their damages were more than the $100,000 coverage of the policy. Since they owned another car that was also insured by the same insurer, State Farm, they sought to "stack" the coverage.

State Farm conceded that the policies could be "stacked". But when they looked at the policy for the second car, they pointed out that there was a "drive other car" exclusion. Since their insured was, indeed, driving another car owned by them, they argued that this provision came into play.

Essentially, they argued that the coverage of the second policy should be stacked. But their position was that the second policy provided zero coverage because of the exclusion. Since $100,000 + $0 = $100,000, they argued that they were off the hook once they paid $100,000.

The case went to court, and the Kenosha County Circuit Court agreed with State Farm. It held that the "drive other car" provision was controlling. The driver appealed to the Wisconsin Court of Appeals, and the Court of Appeals reversed. It held that the "stacking" provision prevailed, and the "drive other car" provision did not change State Farm's liability.

Dissatisfied with this outcome, State Farm took the case to the Wisconsin Supreme Court. The high court took a hard look at the Wisconsin statute, and at the legislative history of this provision. In particular, the court looked toward harmonizing the seemingly conflicting provisions. In particular, the Court noted that allowing stacking would still give the "drive other car" provision its intended effect--preventing the "free rider" problem.

Since the "free rider" problem was not implicated in this case, the Supreme Court agreed with the Court of Appeals that the benefits of the two policies should be stacked. For that reason, the affirmed the Court of Appeals and reversed the lower court's initial decision.

No. No. 2012AP829, 2014 WI 8 (Wis. Feb. 7, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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