Pennsylvania Superior Court Upholds Regular Use Exclusion

On June 30, 2014, the Pennsylvania Superior Court again upheld the “regular use exclusion” in Pennsylvania automobile insurance policies.  Jack Catania, Jr. was injured on August 15, 2009. He was driving a delivery truck for work when he swerved to avoid another vehicle, lost control, and was involved in a single vehicle accident. The vehicle he swerved to avoid fled the scene of the collision and was never identified. Because the other vehicle was never identified, Catania made an uninsured motorist coverage claim to his personal automobile insurance carrier, Erie. Erie denied the claim, citing the “regularly used non-owned vehicle” exclusion in the policy. In addition to denying the claim, Erie filed a declaratory judgment lawsuit against its own insured, Catania, asking the court to issue a judgment declaring that the Erie policy did not provide uninsured motorist coverage to Catania.

The trial court sided with Erie Insurance, finding that because Catania was driving a work vehicle that he regularly drove but did not own, the policy exclusion applied to preclude coverage. Catania appealed to the Superior Court, arguing that he paid premiums to Erie Insurance with an expectation that the coverage provided under the policy would apply to him in any situation where he was injured by an uninsured motorist. The Superior Court upheld the trial court’s decision, relying on a recent line of Pennsylvania appellate case law in support of its finding.

The Pennsylvania Supreme Court addressed the “regular use” exclusion in Williams v. GEICO, 32 A.3d 1195 (Pa. 2011), a case in which a police officer was injured while driving a police car. The at fault party did not have enough insurance to compensate the police officer for all of his losses and damages, and the police department did not carry underinsured motorist coverage on its police vehicles. The police officer made a claim on his personal policy with GEICO, which did carry underinsured motorist coverage that the police officer paid for individually. GEICO denied the claim, and the Pennsylvania Supreme Court sided with GEICO, finding that the exclusion in the GEICO policy that precluded the police officer from accessing his coverage while operating a regularly used, non-owned vehicle was valid under Pennsylvania law and public policy. The police officer argued, to no avail, that if he could not access his GEICO coverage while driving his work vehicle, he had no way to protect himself against underinsured and uninsured motorists. The police officer could not purchase UM/UIM coverage on the police car – he didn’t own the car in order to buy coverage himself and he couldn’t force the police department to purchase the coverage. He also couldn’t negotiate with GEICO to have GEICO remove the regular use exclusion from his personal policy. The Supreme Court was unswayed by the police officer’s predicament – even though he would be entitled under Pennsylvania law to make a claim for underinsured motorist coverage, and he himself purchased underinsured motorist coverage, the exclusion in his policy prevented him from making such a claim. In Hand v. City of Philadelphia, 65 A.3d 916 (Pa. Super. 2013), the Superior Court followed Williams in denying underinsured motorist benefits to another police officer injured in his police cruiser.

The Superior Court in Catania was likewise unswayed by the innocent plaintiff’s situation: Catania was required by his employer to drive a work truck on a daily basis, but the employer elected to not purchase uninsured motorist coverage on its vehicles. Catania could not by coverage for the work vehicle, as he did not own it. He likewise could not require his employer to purchase such coverage to protect him while driving the vehicle. Catania had no ability to control what coverage existed on the work vehicle. The only coverage Catania could purchase was for his personal vehicles – and he did purchase uninsured motorist coverage on his policy with Erie Insurance. Catania’s policy with Erie covered him while using or occupying other vehicles, but excluded from coverage “regularly used, non-owned vehicles.” If Catania had not driven a work vehicle on a regular basis – say for example he usually worked in the office but the delivery driver was sick that day so Catania covered for him – his Erie policy would have provided coverage. Likewise, if Catania had been outside of the work vehicle walking to a business to make a delivery at the time and was struck by a vehicle as a pedestrian – his Erie policy would have provided coverage. However, because Catania was driving a vehicle that he regularly used, but did not own, his personal Erie policy did not provide coverage.

The Superior Court rejected Catania’s argument that he paid premiums to Erie Insurance in exchange for uninsured motorist coverage and therefore had an expectation of such coverage in all situations.  The Court found that Catania could not have had an expectation of coverage while occupying his regularly used work vehicle, as the unambiguous language of the Erie policy excluded coverage in such a situation. The Court further found that Erie’s premium structure clearly reflected that Erie did not contemplate coverage extending to Catania’s work truck, which he used regularly but was not named or described on the Erie policy.

Read the full text of the Superior Court’s opinion here: Erie Ins. Group v. Catania.

If you have questions about how to protect yourself in the event of a car accident that occurs while you are working, contact Erin Rudert at erin@lawkm.com or 412-626-5590.