State Farm Mut. Auto. Ins. Co. v. Balzan, No. CV-24-0140-PR (July 6, 2026) (J.Cruz)  CV240140PR.pdf

MULTIPLE INSURED INDIVIDUALS WHO JOINTLY PURCHASE AUTO INSURANCE AS NAMED INSURED ARE ONE INSURED FOR PURPOSES OF STACKING UIM COVERAGE

Connor Balzan lives with his parents. He has a seperate auto policy with State Farm and his parents have multiple auto policies covering several vehicles. All the policies are with State Farm. Connor was a passenger in a car involved in an accident and the at fault driver's insurance paid policy limits as did his policy under the UIM coverage. State Farm also paid the policy limit under one of the parents' policies but denied coverage based on its anti-stacking provision for any further stacking on the parents' policies.

State Farm filed a declaratory relief action seeking a declaration that Connor could not stack more than one of the  parent coverages and the Maricopa County Superior Court granted State Farm's motion for summary judgment. The Arizona Court of Appeals affirmed and the Arizona Supreme Court affirmed the trial court and vacated the court of appeals decision in part.

A.R.S. § 20-259.01(H).  states:

Uninsured and underinsured motorist coverages are separate

and distinct and apply to different accident situations.

Underinsured motorist coverage shall not provide coverage

for a claim against an uninsured motorist in addition to any

applicable uninsured motorist coverage. If multiple policies

or coverages purchased by one insured on different vehicles

apply to an accident or claim, the insurer may limit the

coverage so that only one policy or coverage, selected by the

insured, shall be applicable to any one accident. If the policy

does not contain a statement that informs the insured of the

insured's right to select one policy or coverage as required by

this subsection, within thirty days after the insurer receives

notice of an accident, the insurer shall notify the insured in

writing of the insured's right to select one policy or coverage.

For the purposes of this subsection, “insurer” includes every

insurer within a group of insurers under a common

management.

The Supreme Court held that while   allows stacking, insurers with proper language can limit such stacking, and when the carrier does, and multiple individuals (here, husband and wife/father and mother) apply for auto coverage together as named insures they stand as one insured for purposes of stacking and thus stacking is not allowed here.

Here State Farm' policy states:

If multiple policies or coverages purchased from the State

Farm Companies by one insured on different vehicles provide

Underinsured Motor Vehicle Coverage which applies to the

same accident or claim, the insured shall select one of these

policies or coverages to apply to the accident. Only the one

policy selected by the insured shall apply and no coverage

will be provided by any of the other policies.

We, therefore, conclude that subsection (H)'s phrase “purchased

by one insured” refers to the named insured purchaser under § 20-259.01(B)

who exercised the legal authority to obtain UM/UIM coverage. Where

multiple named insureds jointly procure coverage, they function as a single

purchasing unit and therefore constitute “one insured” for purposes of

subsection (H). Although ambiguous in isolation, the phrase becomes clear

when § 20-259.01 is read as a whole. The Legislature assigned the decision

to purchase UM/UIM coverage to the named insured purchaser and made

that decision binding on all insureds under the policy. The statute's

purpose confirms that reading. Because Russell and Kimberly either

purchased the Household Policies jointly as named insureds or one acted

on behalf of both in procuring the coverage, the policies were purchased by

one insured within the meaning of subsection (H). State Farm, therefore,

properly limited recovery pursuant to the anti-stacking provision.