Regular Use Definition In Auto Policy

Insurance policies have to be read carefully by an insured and by the insurance law lawyers who want to help the insured.  This is illustrated in an Austin Court of Appeals case styled, Progressive County Mutual Insurance Company v. Edwin Emenike.

This is a summary judgment case granted in favor of Edwin.  Progressive filed an appeal and this Court then reversed and rendered in favor of Progressive.

The facts are undisputed.

Edwin was severely injured in an accident where the other driver was at fault.  The other driver paid his policy limits and Edwin sought coverage for underinsured benefits from Progressive, who denied the claim, stating the white 2006 Dodge Grand Caravan being driven by Edwin was not a listed vehicle and was available for the regular use of Edwin.  Edwin leased the Dodge from Austin Cab, Inc. and Edwin used it as a taxi cab operator.

Part III of the Progressive policy is entitled “Uninsured/Underinsured Motorist Coverages” and provides:

[Progessive] will pay for damages that an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:

  1.  sustained by an insured person;
  2.  caused by an accident;
  3.  arising out of the ownership, maintenance, or use of an uninsured motor vehicle.

There is no dispute that Edwin’s claim for UIM benefits falls within the general scope of UIM coverage under this provision.  Instead, the parties’ coverage dispute centers on whether Edwin’s claim is excluded from UIM coverage under what is commonly referred to as the “regular use” exclusion.

The regular-use exclusion to UIM benefits is included in the Progressive policy under a provision entitled “Exclusions” and states, in relevant part:

Coverage under this Part III [regarding UIM benefits] will not apply:

1.  To bodily injury sustained by any person using or occupying:

….

d.  a motor vehicle that is owned by or available for the regular use of you or a relative.  This exclusion does not apply to a covered auto that is insured under Part III.

Insurance policies typically provide some coverage to an insured and others for the occasional an infrequent use of vehicles other than vehicles specifically insured by the policy.  Conversely, the regular-use exclusion — a typical and common policy provision relieves the insurance company of the unfair burden of insuring an automobile not listed on the policy which an insured uses regularly but for which the insured pays no premiums.

This Court has regularly recognized that the phrase “regular use” unambiguously means a use steady or uniform in course, practice or occurrence, not subject to unexplained or irrational variation.

In this case, the undisputed evidence established that Edwin was an independent contractor who leased the Dodge from Austin Cab on a weekly basis for purposes of operating the taxi business.  At the time of the accident, Edwin had leased the Dodge since January 2013, over 14 months.  Edwin kept the Dodge at his home and parked it in the street most of the time.  The evidence also showed that Edwin drove the Dodge from three to six days each week.

Judgement for Progressive.