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Pennsylvania Excessive Courtroom Backs ‘Common Use’ Exclusion for Underinsured Motorist Cowl



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The Pennsylvania Supreme Courtroom has upheld a “common use” exclusion in an auto insurance coverage coverage that prohibits underinsured motorist protection for accidents involving a non-owned automobile that an insured used commonly.

In so doing, the state’s excessive courtroom reversed a 2020 Superior Courtroom ruling in opposition to Erie Insurance coverage that held that the “common use” exclusion violated the state’s Motor Car Monetary Duty Legislation (MVFRL).


Erie appealed the Superior Courtroom ruling, arguing that by discovering {that a} “common use” exclusion violates the MVFRL, the Superior Courtroom has disregarded many years of precedent upholding the validity of the “common use” exception. Erie argued that the Superior Courtroom’s determination would result in larger premiums to cowl for uninsured/underinsured motorist protection (UM/UIM).

The state Supreme Courtroom has now sided with Erie in its attraction and upheld its personal precedents {that a} “common use” exclusion is legitimate below Pennsylvania regulation.


In November 2015, Matthew Rush, a detective for town of Easton, sustained critical accidents following a motorcar accident by which two drivers crashed into his unmarked 2010 Ford Fusion police automobile. The Ford was owned by town’s police division and was insured below town’s enterprise auto coverage/fleet auto coverage issued by Vacationers Insurance coverage that supplied $35,000 in underinsured motorist protection (UIM).

Rushes’ Declare


Rush and his spouse owned three private autos on two insurance coverage insurance policies by means of Erie Insurance coverage. The Erie insurance policies each included similar “common use” exclusion clauses limiting the scope of UIM protection below the insurance policies. Underneath the “common use” exclusion, UIM protection doesn’t apply to bodily damage to “you” or a “resident” utilizing a non-owned motorcar or a non-owned miscellaneous automobile which is commonly utilized by “you” or a “resident,” however not insured for uninsured (UM)] or [UIM] protection below this coverage.

The events agreed that the insureds didn’t personal or insure town’s Ford on their Erie insurance policies, and that Rush commonly used the automobile for work.


The insurance coverage corporations for the opposite drivers and town supplied Rush with their coverage limits. Nonetheless, as a result of Rush’s accidents and damages exceeded the legal responsibility insurance coverage limits of the tortfeasors and the UIM protection limits of town’s coverage, the Rushes subsequently filed a declare for UIM advantages below the Erie insurance policies. Erie denied protection based mostly on the “common use” exclusion.

UIM protection is designed “to guard the insured (and his further insureds) from the chance {that a} negligent driver of one other automobile will trigger damage to the insured (or his further insureds) and could have insufficient protection to compensate for the accidents brought on by his negligence.”


The Rushes sought a dedication of whether or not Erie can restrict the scope of its UIM protection by means of the “common use” exclusion.

Superior Courtroom


In June 2020, the Superior Courtroom entered partial abstract judgment in favor of the Rushes, holding that the common use exclusion within the Erie insurance policies violates the state’s MVFRL.

In its opinion, the Superior Courtroom noticed that Part 1731 of the MVFRL mandates” that insurers present UIM protection and defines the scope of UIM protection broadly. Protection is required every time an insured suffers accidents “arising out of the … use of a motorcar” and the regulation doesn’t contemplate both the proprietor of the automobile or the frequency with which the insured makes use of it, in keeping with this courtroom.


The Superior Courtroom rejected Erie’s reliance on the Supreme Courtroom’s 2011 determination in Williams v. GEICO Authorities Workers Insurance coverage Co., by which the excessive courtroom discovered {that a} common use exclusion as utilized to a state trooper didn’t violate public coverage. The Superior Courtroom decided that the remark in Williams was non-binding.

Thus the query earlier than the Supreme Courtroom was whether or not the Superior Courtroom’s determination was in direct battle with the Pennsylvania Supreme Courtroom choices and whether or not the Superior Courtroom erred by discovering that the “common use exclusion” violates the MVFRL


In accordance with Erie, the primary time the excessive courtroom thought-about the validity of the common use exception was in 2002 in Burstein whereby the courtroom held that the “commonly used, non-owned automobile exclusion and its contractual restraint on UIM portability comport with the underlying insurance policies of the MVFRL.” 9 years later, the Supreme Courtroom reaffirmed Burstein in Williams v GEICO, whereby it rejected a claimant’s problem {that a} common use exclusion violated Part 1731.

In its attraction, Erie insisted that Burstein and Williams stay controlling regulation.


Erie additional argued that the legislature handed the MVFRL partially to chop the price of vehicle insurance coverage. Erie argued that the Superior Courtroom’s determination will incentivize insurers to boost premiums to cowl the likelihood that folks can commonly drive non-owned automobiles with free of charge UM/UIM protection.

The Rushes argued that the common use exclusion limits the scope of the UIM protection that Erie is required to offer, and thus it’s unenforceable. They highlighted that for the reason that Superior Courtroom determined its case, two federal courts have decided that its reasoning was sound.


The Insureds additional maintained that the Normal Meeting positioned no restrict on the scope of protection as a result of lawmakers acknowledged that “on a regular basis residents commonly use autos they don’t personal and don’t insure below their private auto insurance policies.”

The Insurance coverage Federation of Pennsylvania, the Pennsylvania Affiliation of Mutual Insurance coverage Firms, and the Pennsylvania Protection Institute filed a joint amici transient in assist of Erie. Their argument is nearly completely that the excessive courtroom is certain by its prior choices and will proceed to carry that the common use exclusion doesn’t violate the MVFRL.


In assist of the Insureds, the Pennsylvania Affiliation for Justice submitted an amicus transient in opposition to the exclusion.

The Supreme Courtroom famous, and the events acknowledged, that it beforehand upheld the validity of normal use exclusions in Burstein after which in Williams. The courtroom mentioned the Rushes have been successfully asking the courtroom to overrule these choices.


Burstein concerned a problem to the common use exclusion in a family coverage on the premise that it violated public coverage in relation to first offenders. However the excessive courtroom discovered that to void the common use exclusion would frustrate the general public coverage concern of value containment, reasoning that insurers “could be compelled to underwrite unknown dangers that it has not been compensated to insure” and that insureds could be inspired to acquire UIM protection on one automobile after which “drive an infinite variety of non-owned autos, and obtain free of charge UIM protection on all these autos.” To invalidate the common use exclusion, in keeping with the Burstein opinion, would power insurers “to extend the price of insurance coverage, which is exactly what the general public coverage behind the MVFRL strives to forestall.”

Thus within the current case, the excessive courtroom dominated in favor of its personal precedents and Erie. The courtroom mentioned that whereas the precedents don’t foreclose all novel plain language arguments, they do lead it to reject the exact argument instantly earlier than it. The Rushes’ argument is “not novel, however merely a recitation of one of many similar arguments beforehand rejected,” the courtroom concluded in overriding the Superior Courtroom.



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