PIP Regular Use Exclusion Applies to Ride-Share per Washington Court

The Washington Court of Appeals issued an unpublished opinion on July 22, 2014, addressing the regular use exclusion under the personal injury protection (PIP) provisions of an automobile insurance policy.  In State Farm Ins. Co. v. Rollins, Case No. 45003-8-II (Div. II, July 22, 2014), the court found that an insured riding in a ride-sharing or vanpool was not entitled to PIP coverage pursuant to the regular use exclusion in her insurance policy.  The court reasoned that the exclusion applied because the ride-share vehicle was available for the insured’s regular use and was not covered under the applicable policy.

The case concerned an insured that commuted to work as a passenger in a ride-share when it was involved in an accident.  The insured used the ride-sharing service five days a week for the three years prior to the accident, and primarily used four vans that were owed by the service.  The insured sustained injuries as a result of the accident and filed a PIP claim under her personal automobile insurance policy.  The insurance company denied her claim pursuant to the regular use exclusion, which barred coverage for an insured that sustains injuries while occupying a vehicle that is furnished for regular use and that is not owned by the insured.

After denying the claim, the insurance company filed a declaratory judgment action requesting a judgment that the regular use exclusion barred coverage under the policy.  The parties filed cross-motions for summary judgment on the issue.  The trial court granted the insurance company’s motion, and denied the insured’s motion.  The insured appealed.

In the appeal, the insured argued that application of the regular use exclusion contravened public policy considerations in favor of using ride-sharing arrangements.  The Washington Court of Appeals disagreed and affirmed the trial court’s decision.   The court began its analysis by citing the purpose of the “regular use” exception, which is to “(1) prevent an insured from receiving the benefits of coverage by purchasing only one policy and (2) provide coverage to an insured when the insured is engaged in the casual or infrequent use of a nonowned vehicle.”

The insured conceded in the appeal that the regular use exclusion applied to the loss, but disputed its enforceability on the ground that it violated public policy.  In support, the insured argued (1) that an exclusion from coverage can only be applied in instances in which there is an increased risk of exposure to the insurance company, (2) providing PIP coverage to ride-share passengers is consistent with customer expectations, and (3) RCW 47.04.280 evidences public policy in favor of ride-share arrangements.  The Court of Appeals rejected each of the arguments.  With respect to the first point, the court found that the case law supported by the insured did not support its position and, even so, ride-share arrangements did actually increase the insurance company’s exposure to PIP liability.  The court disposed of the second argument by pointing to prior Washington case law which has found that the regular use exclusion is clear and unambiguous and must, therefore, be enforced as written.  The court rejected the third argument, finding that the statute did not apply to PIP coverage, while noting that the regular use exclusion did comply with Washington law.

The attorneys of Maloney Lauersdorf Reiner regularly represent clients facing personal injury protection (PIP) coverage issues, including in application of the regular use exclusion.  Please contact us with any questions or concerns regarding this case or any other matter you see in the Insurance Coverage Blog.

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