The Montgomery County Court of Common Pleas in An v. Gillmore and Victoria Fire & Cas. Co., No. 2013-civil-06320 (Sept. 2, 2014, Haas J.) addressed the validity of a “named driver only” automobile insurance policy.
There was a motor vehicle accident which occurred on March 20, 2011. Plaintiff An was a driver involved in the accident with defendant driver Gillmore who was driving a vehicle owned by defendant Walker and insured by Victoria Fire & Casualty Company. The Victoria policy contained a provision excluding coverage for any person not listed as a named insured on the policy. The only named insured on the policy was Walker. Defendant driver Gillmore was not listed as a named insured.
A Declaratory Judgment Complaint was filed on the issue of whether or not the carrier had to provide a defense and indemnity to Gillmore. The issue was the validity of “named driver only” policies under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL).
Victoria claimed that it had no duty to defend or indemnify the Gillmore because the policy specifically stated that they “will not provide coverage when the driver of your auto is not listed on the policy.” The Plaintiffs countered that the “named driver only” provision violated Section 1718(c) of the MVFRL and was also against public policy. Additionally, plaintiff asserted that under the statute a “named driver exclusion” can only apply “if the excluded person is insured on another policy of motor vehicle liability insurance. “ 75 Pa.C.S.A. Section 1718(c)(1), (1711)(c)(2).
Although there as no evidence on the record whether or not the defendant driver was indeed insured under another automobile insurance policy, the trial court found the Plaintiff’s argument to be flawed since Section 1718(c) refers to “named driver exclusion” provision within an automobile insurance policy which serves to exclude a particular driver. The instant matter was found to be a different situation involving a “named driver only” insurance policy in which the entire automobile policy is premised upon a particular driver being provided coverage, to the exclusion of everyone else.
The Court found that no section of the Motor Vehicle Financial Responsibility Law precluded “named driver only” policies. As such, Section 1718 was found to be inapplicable. The court additionally rejected the Plaintiff’s argument that the “named driver only” provision was against public policy. To the contrary, the court stated that the type of policy purchased by the owner of the vehicle allowed that person to obtain insurance at a low cost, which was found to further the goal of the public policy behind the MVFRL.
This matter is currently on appeal and pending before the Pennsylvania Superior Court.
