A three judge panel of the PA Superior Court recently disallowed collection of underinsured motorist (“UIM”) coverage against a bus driver’s personal auto insurance; the injuries stemmed from a crash while he was driving a Berks Area Reading Transit Authority (“BARTA”) bus. BARTA did not carry UIM coverage for it’s drivers, but the driver had such coverage under his own personal auto insurance. The Superior Court relied on a Pennsylvania Supreme Court decision which disallowed similar claims by a police officer injured on the job.
In Adamitis v. Erie Insurance Exchange, the three judge panel found that such claims were excluded under the “regular-use” exception in Adamitis’s personal insurance policy. The court also found that such an exclusion was valid under the Motor Vehicle Financial Responsibility Law (“MVFRL”), section 1731. The regular use exclusion bars coverage for accidents in vehicles regularly used by the insured, but not insured under the policy. The reasoning behind disallowing such claims focuses on the goal of the MVFRL, which includes correlating the scope of coverage and setting reasonable premiums for the insured. Allowing such claims, according to the court, would force an insurer to “underwrite unknown risks for which he has paid no premium.” This ruling was handed down even though there was evidence that the insurer did know of the plaintiff’s regular use of the bus, making the use of the bus not necessarily “unknown” to the insurance company.
The regular-use exclusion was added to the plaintiff’s policy in 2004 and his accident occurred in 2005, disproving his argument of insufficient notice of the exclusion. This ruling will ultimately disallow many claims by motorists with UIM protection whose employers do not carry UIM policies for their employees.
For more information about this decision, or about UM/UIM coverage generally, please contact Jay Branderbit at Jbranderbit@kentmcbride.com or 267-702-1713.