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Macabio v. Tig Insurance Co.5/21/1998
ively modest increase in premium, and thus fails the fourth prong of the Mollena test.
As demonstrated in the foregoing analysis, TIG's offer fails to inform the insured that stacking is available for a relatively modest increase in premium. Instead, the "Dear Hawaii Customer" letter advises the insured that "compared to stacked coverage premiums, non-stacked coverage premiums are lower." The coverage selection form also asserts that there is an "increased" premium for stacked coverage. As the Macabios correctly argue, these phrases are misleading because they "mislead insureds into believing that stacking coverage is more expensive." As demonstrated by the previous examples, although it is true that the per-vehicle charge is higher for stacked coverage, for persons who insure two cars or more, the total premium for the same amount of coverage is actually lower if the stacking option is chosen. Thus, for an insured with multiple vehicles, stacked coverage is the less expensive alternative.
Evidence of the legislative intent in enacting the 1992 amendments to the motor vehicle insurance law is contained in the conference committee report. The committee report states:
Because the bill also contains a prohibition against stacking of UM and UIM benefits, these provisions will allow consumers to obtain sufficient UM and UIM insurance coverages. This trade-off between the elimination of stacking and these optional coverages will be equitable only if consumers are fully informed of their loss of rights and ability to protect themselves through voluntary additional options at a nominal cost.
Hse. Conf. Comm. Rep. No. 150, in 1992 House Journal, at 878 (emphasis added). The voluntary additional options referred to are in the optional stacking requirements. The intent of the legislature that consumers be fully informed is undercut by TIG's misleading information and set-up of the application for UM and UIM coverage. It would not be apparent to the average consumer that the same level of coverage could be purchased at a lower premium by using the stacking option. Also, the format of the coverage selection form, where the purchaser must initial next to the UM and UIM coverage clause to reject such coverage, but must initial next to the stacking clause to select the option, is confusing to the average consumer. Thus, the offer fails the fourth prong of the Mollena test.
Accordingly, TIG's offer contained in the "Dear Hawaii Customer" letter and the coverage selection form was legally insufficient insofar as it failed the third and fourth prongs of the Mollena test.
C. TIG was required to obtain written rejection of stacking for uninsured motorist coverage.
The Macabios' next argument is that TIG was required to obtain a written rejection of the stacking option as mandated by HRS ยง 431:10C-301(d) (Supp. 1992). The Macabios contend that subsection (d), requiring written rejection of underinsured and uninsured motorists benefits also applies to subsection (c), which requires an offer of stacked coverage. When all of the subsections pertaining to stacking are read together, it is clear that TIG was required to obtain a written rejection from the Macabios. Accordingly, the Macabios' failure to return the form was not a proper rejection of the option to stack, and thus stacking of their UIM benefits must be implied as a matter of law.
TIG counter argues that the statute only requires that it offer the stacking option and that it need not provide for written rejection of the offer. TIG contends that subsection (c) is entirely separate from subsection (d) and does not require a written rejection of stacking benef
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