Regular Use Exclusion Upheld in Circumstances Involving Third-Party Liability Coverage

Regular Use Exclusion Upheld in Circumstances Involving Third-Party Liability Coverage

Regular Use Exclusion Upheld in Circumstances Involving Third-Party Liability Coverage

Michele Burton sustained personal injuries in a motor vehicle accident caused by the negligence of Joyce Frisbie, who was driving her brother’s Chevrolet Tahoe. The Chevy Tahoe was insured by Erie Insurance, which provided bodily injury liability coverage in the amount of $100,000 per person/$300,000 per accident. Erie notified the Defendant, Progressive Insurance, who provided liability coverage to Frisbie in the amount of $250,000 per person/$500,000. The only vehicle listed on the Progressive policy was Frisbie’s Honda Civic. The Progressive policy provided, in the relevant part:

Coverage will not apply to any insured person for bodily injury or property damage arising out of the ownership, maintenance or use of any vehicle owned by you or furnished or available for your regular use, other than a covered auto for which this coverage has been purchased.

“Covered auto” means:

  1. any auto or trailer shown on the declarations page for the coverages applicable to that auto or trailer;
  2. any additional auto;
  3. any replacement auto; or
  4. a trailer owned by you.

During a recorded statement, Frisbie stated that the Tahoe was not Frisbie’s brother’s primary vehicle. She had her brother’s permission to drive the Tahoe for one to two months leading up to the accident because her Civic needed repairs. Accordingly, Progressive determined that because the Tahoe was available for “regular use,” and was not listed in the policy, coverage was being denied.

Burton sued Frisbie for her negligence in causing the accident and also asserted a claim for underinsured motorist (“UIM”) benefits under his own automobile insurance policy issued through State Farm. Frisbie testified that she had possession of the Tahoe “7 days a week, 24 hours a day” and parked it at her home. Dale Faux, the Progressive claims adjuster, testified that Progressive interprets regular use to mean “consistent, habitual, with no sign of stopping and with recurring access.” Accordingly, Progressive denied coverage because it was unknown when Frisbie’s use of the Tahoe was going to end.

A bench trial verdict was entered in favor of Burton and against Frisbie in the amount of $320,871.30. Progressive did not defend Frisbie or pay any amount toward the verdict. Erie Insurance tendered its bodily injury liability policy limits of $100,000 to Burton in partial satisfaction of the verdict.

Frisbie assigned her rights to pursue any claims against Progressive to Burton, and Burton sued Progressive. Burton argued that the regular use exclusion is unenforceable as it limits the scope of liability coverage that the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) requires, citing to Rush v. Erie Ins. Exchange, 265 A.3d 794 (Pa.Super. 2021), and Evanina v. First Liberty Ins. Corp., 2022 WL 584499 (M.D.Pa. 2022). The Court agreed with Progressive and concluded that Rush and Evanina were underinsured (“UIM”) claims cases, wherein the regular use exclusion was found to be unenforceable as being contrary to §1731 of the MVFRL, which governs the scope of UIM claims, and because this case did not involve a UIM claim, and only a third-party liability claim, §1731 did not apply.

Burton also argued that because the use of the Tahoe was temporary, it did not constitute regular use. The term “regular use” has been defined by the courts as “a principal use as distinguished from a casual or incidental use.” Nationwide Mut. Ins. Co. v. Shoemaker, 965 F.Supp. 700 (E.D.Pa. 1977) .In Shoemaker, the court found that a granddaughter’s use of her grandmother’s car on a daily basis over a period of three weeks constituted regular use. There, the court recognized two factors as “significant clues” to the presence of regular use, those being blanket permission to use the vehicle and an available set of keys. While these factors may not be “universally important indicia” for regular use in every case, they are for situations concerning family members. See Prudential Prop. & Cas. Ins. Co. v. Hinson, 277 F. Supp. 2d 468, 474 (E.D. Pa. 2003).

Based on the facts and the cases cited above, the Court granted Progressive’s Motion for Summary Judgment, finding that Frisbie had regular use of the Tahoe.

Link to Burton v. Progressive Adv. Ins. Co., No. 3:21-CV-01522-MEM (M.D. Pa. March 20, 2023).