PLPennsylvaniahard
Under Pennsylvania law as construed in *Houck v. State Farm* and 75 Pa.C.S. § 1731, when an insured recovers the tortfeasor's full BI liability limits and then pursues UIM benefits, how is the UIM payment typically calculated on a properly stacked policy?
AUIM pays the full stacked UIM limit with no offset for the tortfeasor's BI recovery
BUIM is not available because the tortfeasor had liability coverage
CUIM is capped at the PA financial responsibility minimum of $15,000
UIM pays the stacked UIM limit reduced by the tortfeasor BI recovery (offset)
Why this is the answer
Under 75 Pa.C.S. § 1731 and Houck-line cases, UIM is gap coverage: the insured's UIM limit (stacked if not waived under § 1738) is reduced by amounts recovered from the tortfeasor's BI policy, leaving the insurer to pay only the shortfall.
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