Trial Court Finds That Regular Use Exclusion Applies to Rental Vehicle Rented by Employer for Employee's Use

In the case of Rawl v. Geico, No. 11435-CV-2018 (C.P. Beaver Co. July 1, 2019 Ross, J.), the court issued an Opinion in a declaratory judgment action instituted by a Plaintiff against Geico Insurance Company in which the Plaintiff sought a judicial declaration on an issue of coverage involving the regular use exclusion under the policy.  

According to the Opinion, the Geico policy contained a regular use exclusion applicable to UIM claims under the policy, which exclusion provided that when an insured is “using a motor vehicle furnished for the regular use of you, your spouse, or a relative who resides in your household, which is not insured under this policy” coverage is excluded.  

The Plaintiff in this matter was involved in a motor vehicle accident that was the fault of a third party tortfeasor.   The Plaintiff secured the liability limits from the tortfeasor and then turned to Geico for UIM coverage.

At the time of the accident, the Plaintiff was occupying a Dodge Ram van which had been rented by his employer, State Industrial Products, from Enterprise Rent-A-Car.   The The plaintiff was using the rental van because his employer’s regular work van was out of service on the date of the accident.  

The rental van was insured by Traveler’s Insurance Company and provided UIM coverage, which the Plaintiff received.  As noted, the Plaintiff then made a claim for additional UIM benefits under his own policy with Geico.  Geico denied the claim based upon the regular use exclusion contained in the Geico policy, asserting that the rental van in question was a temporary substitute vehicle for the Plaintiff’s work van.  

The parties agreed in a joint stipulation of facts that the rental van in question was not a part of the regular fleet of vehicles owned and operated by the Plaintiff’s employer.   It was further agreed that the rental van had been picked up and rented for only one or two days leading up to the subject accident.   It was additionally agreed between the parties that the Plaintiff had not operated that same rental van on any prior occasion for any purpose.  

Based upon the facts before the court, the parties filed cross-Motions for Summary Judgment. 

The defense asserted that the Plaintiff in this matter was operating a rental vehicle which was a replacement for his regularly used company provided vehicle.   The Defendant carrier submitted that this is a distinction without difference with respect to the regular use exclusion since the vehicle in question was available for the Plaintiff’s regular use at the time of the accident.   The carrier asserted that the fact that the Plaintiff may have used the rental vehicle on only one or two occasions prior to the accident was not material. The fact remained, according to the defense, that the vehicle was furnished and available for the Plaintiff’s regular use. 

In contrast, the Plaintiff pointed to the stipulation of the parties confirming that the rental van in question had only been rented for one or two days before the incident and not any extended period of time to qualify as a temporary substitute vehicle under the policy.   The Plaintiff also emphasized that he did not operate the same rental van on any prior occasion for any purpose.   As such, the Plaintiff asserted that the rental van did not fall within the definition of a vehicle furnished for the regular use of the Plaintiff.  

After a review of the positions of both parties in this matter, as well as a summary of the current status of Pennsylvania law on the regular use exclusion, the court noted that the case before it appeared to be one of first impression.  

Based upon his review of several cases involving the regular use exclusion, Judge Ross held that the exclusion applied in this matter to warrant summary judgment in favor of the Defendant insurance company. 

Anyone wishing to review a copy of this case may click this LINK.

I send thanks to Attorney Joseph Hudock of the Pittsburgh law firm of Summers, McDonald, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.