Thursday, November 13, 2014

"Name Driver Only" Type of Automobile Insurance Policy Upheld as Valid (Decision Now On Appeal)


In a recent Montgomery County Court of Common Pleas decision in the case of An v. Gillmore and Victoria Fire & Cas. Co., No. 2013-Civil-06320 (C.P. Mont. Co. Sept. 2, 2014 Haas, J.), the court addressed the validity of a “named driver only” automobile insurance policy (as opposed to a "Named Driver Exclusion" provision that may be contained within an automobile insurance policy.).

The policy at issue contained a “named driver only exclusion” which excluded coverage for any person not listed as a named insured on the policy.

The Defendant driver involved in the accident was not listed on the policy. Rather, only the owner of the vehicle was the sole driver listed under the terms of the policy.

This matter was a declaratory judgment action on the issue of whether or not the carrier had to provide a defense and indemnity under the circumstances presented.

The case raised the issue of the validity of these types of "named driver only" policies under Pennsylvania's Motor Vehicle Financial Responsibility Law.

The insurance company filed a Motion for Summary Judgment on this declaratory judgment action claiming that it had no duty to defend or indemnify the Defendant driver because the policy specifically stated that the carrier “will not provide coverage when the driver of your auto is not listed on the policy.”

  The Plaintiffs countered that the “named insured” policy provision violated §1718(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law and was also against public policy. (Pertaining to the validity of a “named driver exclusion”).

More specifically, the Plaintiff asserted that, under the statute, a “named driver exclusion” can only apply “if the excluded person is insured on another policy of motor vehicle liability insurance.” 75 Pa. C.S.A. §1718(c)(1), (1711)(c)(2).

Although there was no evidence in the record on whether or not the Defendant driver was indeed insured under another automobile policy, the trial court found the Plaintiff’s argument to be flawed since §1718(c) refers to named driver exclusion provision within an automobile insurance policy which serves to exclude a particular driver, as opposed to the different situation presented in this matter involving a "named driver only" insurance policy in which the entire automobile policy is premised upon a particular driver being provided coverage to the exclusion of everyone else.

The trial court found that no section in the Motor Vehicle Financial Responsibility Law precluded “named driver only” policies. As such, §1718 was found to be inapplicable.

The court additionally rejected the Plaintiff’s Complaint that the “named driver only” policy was against public policy. To the contrary, the court stated that the type of policy purchased by owner of the vehicle allowed that person to obtain insurance at a low cost, which was found to further the goal of the public policy behind the Motor Vehicle Financial Responsibility Law in attempting to curtail the increasing cost of insurance premiums.

As such, the court granted the carrier’s Motion for Summary Judgment and denied the injured party Plaintiff’s Motion for Summary Judgment on the declaratory judgment issues pertaining to coverage for the Defendant driver.

It is noted that this decision has been appealed and is currently pending before the Pennsylvania Superior Court.

Anyone wishing to secure a copy of this Opinion may contact me at dancummins@comcast.net.


Source of Imagewww.automotorblog.com


 

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