Regular Use Exclusion Ruled Unenforceable by Pennsylvania Superior Court

In a case appellate first impression of Rush v. Erie Insurance Exchange, No. 1443 EDA 2020 (Pa. Super. Oct. 22, 2021 Bender, P.J.E., Dubow, J., and Stevens, P.J.E.), the Pennsylvania Superior Court affirmed a Northampton County Court of Common Pleas decision in a declaratory judgment action and held that the Regular Use Exclusion found in motor vehicle policies is unenforceable because it violates the Motor Vehicle Financial Responsibility Law (MVFRL).

The Regular Use Exclusion typically holds that a carrier need not provide UM or UIM coverage to a person who, unbeknownst to the carrier, is driving a vehicle that is regularly available for the use of that person.

In this Rush case, a police officer was injured while driving a police car that was regularly available for his use.

Outside of work, the Plaintiff police officer owned three vehicles at home which were covered by Erie Insurance.  The police officer had one Erie policy on one of the vehicles and another Erie policy that provided for stacked UIM coverage on the other two personal vehicles.

After securing a recovery against the drivers of the other vehicles in the accident, the police officer turned to Erie Insurance for UIM coverage under his personal vehicles.

Erie responded by asserting that the Regular Use Exclusion precluded coverage under the Erie Insurance policies because the police car that the Plaintiff was driving at the time of the accident was a vehicle that was regularly available for the Plaintiff's use.

The court noted that, absent the Regular Use Exclusion, there was no dispute that the Plaintiff police officer would have been entitled to the requested UIM coverage.

More specifically, the Plaintiff was injured in a car accident, he was legally entitled to recover from the underinsured tortfeasors, and Erie had never obtained a 75 Pa.C.S.A. Section 1731 written waiver or rejection of UIM coverage from the Plaintiff (rather, the Plaintiff had chosen to purchase stacked UIM coverage).

In ruling that the Regular Use Exclusion was unenforceable, the Superior Court agreed with the trial court's decision that the Regular Use Exclusion impermissibly limits the scope of UIM coverage required by Section 1731 by precluding coverage if an insured is injured while using a motor vehicle that the insured regularly uses but does not own.  

The Superior Court found that the Regular Use Exclusion conflicted with the broad language of Section 1731(c), which requires that UIM coverage to be afforded where an insured sustains injuries arising out of the "use of a motor vehicle."  See Op. at p. 7 [Emphasis in Opinion].

In other words, the Regular Use Exclusion was found by the courts in Rush to impermissibly limit Section 1731(c)'s mandate in favor of coverage to only those situations where an insured was injured in an accident involving a vehicle owned by the insured or only occasionally used by an insured.

Given that, in the eyes of the Rush Court, the Regular Use Exclusion conflicted with the clear and unambiguous language of Section 1731, the Exclusion was ruled unenforceable.

The Superior Court noted that, while it was affirming the trial court's decision, the Superior Court was doing so under a different rationale.  For a review of the trial court's decision which was based, in part, on an application of the rationale from the Gallagher v. GEICO Household Exclusion decsion as well as on an application of 75 Pa.C.S.A. 1734, please click this LINK to get to that Tort Talk post (which also has a Link to that trial court opinion).

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

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this decision to my attention.

Source of image:  Photo by Ekaterina Bolovtsova from Pexels.com.