Tuesday, April 21, 2015

Automobile Insurance Policy Providing Coverage to "Named Driver Only" Upheld as Valid

Tort Talkers may recall the prior November 13, 2014 Tort Talk post on the Montgomery County case of An v. Gillmore & Victoria Fire and Cas. Co. in which that court upheld the validity of a "Named Driver Only" policy.  (Click HERE to view that post).

Note that this is not a Named Driver Exclusion provision case.

Rather, a "Named Driver Only" policy is an automobile insurance policy that provides liability coverage only for the named insured driver that is listed in the policy.

As an update, it is noted that, in what may be an appellate decision of first impression, the Pennsylvania Superior Court has affirmed the trial court decision in this case at 2015 Pa.Super. 84 (Pa. Super. April 17, 2015 Gantman, P.J., Shogun, and Allen, JJ)(Op. by Shogun), thereby upholding the validity of these types of automobile insurance policies.

The policy at issue contained a “named driver only exclusion” which excluded coverage for any person not listed as a driver 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 Pennsylvania Superior Court agreed with the notion that, where the application for insurance coverage and the policy documents repeatedly and clearly expressed that coverage would only be provided to the driver identified in the policy (and for a substantially reduced premium), the parties would be held to their agreement in this regard in the insurance contract and the provisions should be upheld.  

The court found that this type of insurance agreement did not violate the provisions of Pennsylvania's Motor Vehicle Financial Responsibility Law or the public policy of Pennsylvania.

Anyone wishing to review a copy of the Superior Court's decision in An may click this LINK.

I send thanks to the prevailing defense attorney Victor M. Verbeke, Esquire, of the Plymouth Meeting branch of the Law Office of Jill Snyder, for bringing this decision to my attention.

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