Arizona Supreme Court Clarifies Meaning of “One Insured” in Arizona’s Anti-Stacking Statute.

State Farm Mut. Auto. Ins. Co. v. Balzan, No. CV-24-0140-PR

Supreme Court of Arizona

July 6, 2026

JSH Attorneys: Liz Garcia, Sandy Gerber

Arizona Supreme Court Holds That Multiple Insured Individuals Who Jointly Obtain Insurance Coverage Constitute “One Insured” under Arizona’s Anti-Stacking Statute.

Yesterday, the Arizona Supreme Court issued a decision resolving an ambiguity in Arizona’s anti-stacking statute, A.R.S. § 20-259.01(H).  Specifically, it clarified the term “one insured” as used in the anti-stacking statute.

The case involved a household, whose members had purchased various policies from the insurer, State Farm. The parents of the household, Russell and Kimberly, were insured under four policies covering four different vehicles (the “Household Policies”), which were paid with by their community funds, and which each provided underinsured motorist coverage. Their son, Connor, purchased a policy for a fifth vehicle, which insured both him and his father, Russell, and which also provided UIM coverage.  Importantly, each of the five policies contained an identical anti-stacking provision barring recovery under more than one policy “purchased from the State Farm Companies by one insured” for the same accident.

In 2019, Connor was injured in a car accident and made a UIM claim under the policy he had purchased. State Farm paid the policy limits to Connor for that vehicle’s coverage.  Connor, however, also sought UIM coverage under the four Household purchased by his parents, and sought to stack coverages.  Although State Farm paid the policy limits under one of the Household Policies, it declined to stack coverages for the other three policies, based on the anti-stacking language included in each of the policies, reasoning that Russell and Kimberly were joint purchasers who together constituted “one insured” for purposes of the anti-stacking provision.

State Farm sued for declaratory relief. The parties subsequently filed cross-motions for summary judgment.  The superior court granted summary judgment in State Farm’s favor, denying Connor’s cross-motion. The court of appeals affirmed the result but on different reasoning, holding that Russell and Kimberly were two insureds, not one, but were nevertheless jointly bound by the anti-stacking provision because they jointly purchased the policies. The Arizona Supreme Court granted review to resolve whether multiple insureds who jointly purchase multiple policies from the same insurer constitute “one insured” under A.R.S. § 20-259.01(H).

The specific language the Arizona Supreme Court clarified states, in relevant part:

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.

A.R.S. § 20-259.01(H) (emphasis added).   Recognizing that the statue also refers to a “named insured,” the Arizona Supreme Court concluded that the phrase “purchased by one insured” was ambiguous because it could be interpreted as referring to “any person who contributed funds toward the premium payment,” or as referring to “the person who purchased the policy or coverage by accepting the insurer’s offer of coverage and entering into the insurance contract.”

Reading subsection (H) together with the remainder of § 20-259.01, the Court concluded that “one insured” refers to the “named insured,” which is the purchaser of UM/UIM coverage who, alone, possesses the statutory authority to accept or reject the offer.  The named insured’s election “governs the policy and determines the persons insured under it.”  Resident relatives, permissive users, passenger, and other insureds do not get to make separate coverage elections and are instead bound by the named insurer’s election.

In reaching this decision, the Arizona Supreme Court rejected the contention that every insured who contributed toward a premium qualifies as a purchaser, concluding that purchaser status turns on who procured the coverage, and not on who contributed funds toward its cost.  The Court also rejected the argument that payment of premiums from community funds transforms spouses into separate purchasers of the policy.  As the Court explained, “The relevant question is not whose money funded the premium payment, but who exercised the statutory authority to obtain UM/UIM coverage” because § 20-259.01 “assigns that authority to the named insured who received and accepted the insurer’s offer of coverage.”   The result is the same whether one spouse acts to procure a policy (and therefore purchases the policy or coverage within the meaning of subsection (H)), or both spouses jointly exercise statutory authority to obtain UM/UIM coverage—the spouses constitute “one insured” for purposes of subsection (H).

The Court thus concluded that because Russell and Kimberly either purchased the Household Policies jointly as named insureds or one acted on behalf of both in procuring the coverage, they functioned as a single purchasing unit and thus constituted “one insured,” for purposes of the anti-stacking statute.  As a result, the Court held that State Farm did not err by treating Connor’s policy as once source of coverage and treating his parents four Household Policies as a second source, subject to the anti-stacking prohibition.