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Is the Regular Use Exclusion in Vehicle Coverage Becoming a Relic of the Past?

By Jason G. Bates, Esquire

Recent decisions in Pennsylvania appear to be eroding the Regular Use Exclusion in Pennsylvania. Most automobile insurance policies in Pennsylvania contain a “regular use” exclusion to insurance coverage whenever an injured individual was in a vehicle that was regularly available for that individual’s use but was not covered by the insurance policy at issue. The rationale for this exclusion is to prevent an insurance carrier from providing coverage to an injured party where, unbeknownst to the carrier, the injured party regularly used another vehicle which was not covered under the carrier’s policy because the carrier has not been paid a premium by the injured party to cover that risk.

Historically, this exclusion to coverage has survived challenges to its validity in Pennsylvania courts and recently has continued to do so. (See Williams v. Geico Government Employees Insurance, 32 A.3d 1195 (Pa. 2011); and more recently in two unpublished Pennsylvania Superior Court cases: Rawl v. Geico, No. 1086 WDA 2019, 237 A.3d 1042 (Pa. Super. 2020)(unpublished) and Eckert v. Unitrin Auto Home Insurance, No. 1013 EDA 2019 (Pa. Super. 2020)(published)).

This seemingly secure footing for the “regular use” exclusion, came under attack by the recent case of Rush v. Erie Insurance Exchange which is currently making its way to the Pennsylvania Supreme Court.

At the trial court level, the Rush court held that the “regular use” exclusion violated Pennsylvania’s Motor Vehicle Financial Responsibility Law (“MVFRL”). The plaintiff in Rush was a police officer who was injured while driving a police vehicle that was regularly available for his use at work. The Plaintiff was seeking UIM coverage under his personal automobile insurance policy.

The Pennsylvania Superior Court heard argument on this matter and similarly held that the regular use exclusion found in motor vehicle policies was unenforceable because it violates the MVFRL. However, the Superior Court rationale differed from the trial court and found that the regular use exclusion impermissibly limited the scope of UIM coverage by precluding coverage if an insured is injured while using a motor vehicle that the insured regularly uses but does not own.

Rush may place the historical reliance on the “regular use” exclusion in jeopardy. Although Rush is not the first case in Pennsylvania to rule this way, it will be the first Pennsylvania Supreme Court to address this issue in over ten years. There have been two very recent cases in two separate Federal District Courts in Pennsylvania which both found the “regular use” exclusion to be invalid: Johnson v. Progressive Advanced Insurance, (W.D. Pa. Feb. 23, 2022) and Evanina v. The First Liberty Insurance Corp., (M.D. Pa. Feb. 25, 2022); however, Rush is poised to possibly be the first Pennsylvania Supreme Court ruling on this issue in over a decade.

Until these decisions, the regular use exclusion had been repeatedly upheld as valid through decades of decisions up through the Pennsylvania Supreme Court’s 2011 decision in Williams and the two unpublished decisions within the Pennsylvania Superior Court.

Rush awaits a decision if it will be heard by the Supreme Court. If the Pennsylvania Supreme Court decides to grant allocator and hear Rush, then it will either uphold decades of past precedent, including decisions from the Pennsylvania Supreme Court itself (finding enforceability and validity in the regular use exclusion) or it could possibly overturn this precedent which will undoubtedly favor plaintiffs in future personal injury cases and cause insurance carriers to reevaluate their risks.