ARE YOU PROTECTED?

The Pennsylvania Supreme Court decided the case of Rush v. Erie Insurance, on January 29, 2024.  See Rush v. Erie Ins. Exch., No. 77 MAP 2022 (Pa. Jan. 29, 2024).  The Pennsylvania Supreme Court decided that a “Regular Use Exclusion” was valid and could be used to deny payment of Underinsurance Benefits under a personal vehicle insurance policy. The effect of this decision by the Supreme Court has drastic and widespread implications to individuals that drive company vehicles, including but not limited to police vehicles.

In Rush, a police officer was injured in a motor vehicle accident, which involved his operation of a police vehicle owned by the City for which he was employed.  The police vehicle only maintained $35,000 in Underinsured Motorist Coverage. The officer attempted to recover benefits under his personal Underinsured Motorist policy.  The claim was denied based upon “Regular Use Exclusions,” which provided that the underinsured coverage did 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 or underinsured coverage under this policy.”

The Supreme Court’s found that Uninsured and Underinsured Motorist Coverage is not “universally portable.”  The Court explained that “[o]nce it is decided that UIM coverage is not universally portable – given the express non-priority of an insured’s UIM policy coverage in Section 1733 and the contrary priority of coverage for first-party benefits – any argument that Section 1731 prohibits exclusions from coverage in the insurance contract must fail.  If the MVFRL does not require that UIM coverage follow the insured in all circumstances, then the MVFRL cannot be read to prohibits exclusions from UIM coverage.  Consequently, the insurance contract controls the scope of UIM coverage, and the ‘regular use’ exclusion is enforceable.”

The practical effect upon individuals that regularly operate vehicles that they do not own could result in being left without sufficient coverage for injuries sustained in an automobile accident.