“Regular use” auto insurance exclusion to face Pennsylvania Supreme Court

Auto insurance exclusion - Person driving vehicle
“Regular use” auto insurance ex...
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The court agreed to consider a case that would add limitations to its use in car policies.

Pennsylvania’s Supreme Court has agreed to the consideration of a case that would restrict the use of the “regular use” auto insurance exclusion.

The reason is that the policy rule may be in violation of the motor vehicle financial responsibility law.

This consideration of the case would be a review of a ruling made by a Superior Court, in which it determined that the regular use auto insurance exclusion is in violation of Pennsylvania motor vehicle financial responsibility law. This common policy rule precludes coverage for the injuries of those who are insured if they are driving vehicles that they use on a regular basis but don’t actually own.

The Superior Court’s three-judge panel ruled in October 2021 that the application of this type of rule to a policy cannot be enforced because it restricts the scope of the underinsured motorist (UIM) coverage requires insurers to provide due to the Motor Vehicle Financial Responsibility Law (MVFRL). The Superior Court’s ruling was based on the determination that an insurer is responsible for providing UIM coverage unless a valid rejection form was signed by the insured. The Superior Court’s ruling also upheld a trial court’s decision from 2020.

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The Superior Court’s decision about the auto insurance exclusion is being challenged by Erie Insurance Exchange.

The challenge to the Superior Court’s ruling is being made by the Erie Insurance Exchange. That insurer is arguing that the regular use limitation is both legitimate and enforceable within the UIM coverage requirements for those who are insured.

Now, it is up to the Pennsylvania Supreme Court to determine whether it will uphold the lower court’s ruling regarding that policy limitation.

This specific case has to do with Easton police detective Matthew Rush, who was seriously injured when two other motorists drove into his police car in November 2015. The police car involved in the crash was owned by the city of Easton, which insured the vehicle through a policy providing for UIM coverage. That said the UIM claim made by Rush was denied by Erie Insurance Exchange because he was not the owner of the vehicle, though he regularly drove the police car.

Rush also had coverage through the insurer for three personal cars on two policies. They paid for stacked UIM coverage on both their car policies. That said, both policies had identical regular use auto insurance exclusion clauses which were to preclude the insurer for having to provide UIM coverage when an insurer suffered injuries as a result of the use of a vehicle the insured did not own but used on a regular basis.

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