The Pennsylvania Supreme Court in Rush v. Erie Insurance Exchange, No 77, MAP 2022 (Pa. Jan. 29, 2024) (Maj. Op. by Donahue, J.) (Concurring Op. by Wecht, J.) upheld the validity of the Regular Use Exclusion and ruled that, as presented in this case, the Regular Use Exclusion contained in motor vehicle insurance policies does not violate the express language of Pennsylvania’s Motor Vehicle Financial Responsibility Law. (MVFRL)
The plaintiff in Rush was a police officer who was injured in a motor vehicle accident while driving his Ford patrol vehicle. The plaintiff recovered the liability limits from the tortfeasor’s policy and the UIM limits on the police vehicle. The plaintiff then sought to obtain UIM coverage from the Erie Insurance policies that covered his personal vehicles at home. Erie Insurance relied upon a Regular Use Exclusion contained in the policy to deny coverage on the UIM claim.
Specifically, under the “regular use” exclusion, UIM coverage does not apply to: “Bodily injury to “you” or a “resident” using a non-owned “motor vehicle” or a “non-owned” miscellaneous vehicle which is regularly used by “you” or a “resident”, but not insured for uninsured (“UM”) or (UIM) coverage under this policy.”
The parties agreed that the Plaintiff did not own / insure the Ford on their Erie Policies and that Rush regularly use the car for work. The question before the court was then whether the “regular use” exclusion in a motor vehicle insurance policy violates the express terms of the MVFRL.
The Supreme Court rejected the Plaintiff’s arguments that UIM coverage must be provided in all circumstances, regardless of which vehicle the injured party was located in at the time of the accident. The court ruled that to accept such an argument would render all exclusions invalid. The Court rejected this argument. The Supreme Court ruled that if the MVFRL does not require that UIM coverage follow the insured in all circumstances, then the MVFRL cannot be read to prohibit exclusions from UIM coverage. Therefore, the Court ruled that the terms of the UIM insurance contract between the parties still controlled relative to the scope of UIM coverage available, or not available, and that, therefore, the Regular Use Exclusion remained enforceable.
The Supreme Court in Rush also specifically held that the Regular Use Exclusion remained a permissible limitation of UIM coverage within the language of the MVFRL and that, “with decades of reliance by insureds and insurers, and no justification to allow this Court to depart from decades of established law,” the Court would maintain its continued course on this issue “unless and until the General Assembly or the Insurance Department acts in a way that would suggest we do otherwise.”
The Supreme Court overruled the lower court decisions and held that the Regular Use Exclusion remained valid and enforceable.