Pennsylvania Auto Insurance’s ‘All-Time Use’ Law Faces Supreme Court Scrutiny

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The Pennsylvania Supreme Court has agreed to consider a case that would limit the use of “infrequent use” in the auto insurance industry.

The state’s highest court has agreed to review a high court’s ruling that non-regular use violates the state’s driving laws. Infrequent use prevents insurance coverage when using vehicles that are not owned but used regularly.

Last October, a three-judge panel of the Supreme Court ruled that non-use coverage is untenable because it reduces the amount of UIM coverage that the Motor Vehicle Financial Responsibility Law (MVFRL) requires insurers to provide. The Supreme Court found that an insurer is obligated to provide UIM coverage only if the insured signs a valid waiver. The decision was in line with the Supreme Court’s decision in 2020.

Erie Insurance Exchange is challenging the Superior Court’s decision. It states that non-use is always acceptable and restricts the coverage of UIM that it is required to provide to the Insured.

The state’s Supreme Court is now deciding whether a lower court erred in banning the general use.

The case involves Easton City Detective Matthew Rush, who was seriously injured when two other drivers crashed into his police vehicle on November 28, 2015. The City of Easton owned the police vehicle and insured it through an insurance policy that it gave. for UIM coverage.

Erie Insurance Exchange denied the Rushes’ UIM claims because they did not own, but regularly use, a police car.

The Rushes three car insurance for two insurance through Erie Insurance. They paid for UIM coverage on both points. All Erie policies contain similar “regular use” clauses that prevent Erie Insurance from providing UIM coverage when the insured is injured as a result of the use of a vehicle that the insured regularly uses, does not own, and is not insured under Erie’s policies. A UIM claim is triggered when the victim’s insurance is insufficient to cover the injuries sustained in the accident.

According to the Supreme Court, it must decide whether the decision of the Supreme Court conflicts with the decisions of the Supreme Court of Pennsylvania and whether the Supreme Court erred as a matter of law in finding that non-use always violates the law of financial responsibility.

The Supreme Court held that insurers are exempt from the obligation to provide coverage that is uninsured or underinsured, or both, unless the insured waives such coverage by signing a “valid waiver.”

The court held that financial responsibility dictates that insurers provide coverage when the insured meets three requirements. The insured must have been injured as a result of repairing or operating the vehicle; be legally entitled to recover damages from the insured driver; and did not object to the issuance of the UIM by signing an official denial form.

“[T]The MVFRL’s coverage of motor insurance coverage, and the benefits provided below, are available to all motor insurance providers in this Commonwealth. More importantly, if the provision of an insurance contract is inconsistent with the MVFRL, we will find the provision voidable,” the Supreme Court said.

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