The Georgia Court of Appeals recently held that the “regular use” exclusion in an insured’s automobile insurance policy barred coverage for an accident that occurred while the insured was using a friend’s car. State Automobile Mutual Insurance Co. v. Todd, 2011 WL 753282 (Ga.App., 2011).
In Todd, the insured had an automobile insurance policy that specifically excluded from liability coverage “[a]ny vehicle, other than ‘your covered auto,’ which is: a. owned by you, or b. furnished or available for your regular use.” On August 16, 2003, while driving her friend Ernest Camden’s car, the insured was involved in a collision with another vehicle operated by Steve Purvis. The insured had borrowed Camden’s car to go on vacation and was returning from a nine-day trip when the accident occurred. She had been staying with Camden and did not have her own vehicle, so Camden allowed her to use his car. Because Camden had certain health issues, the insured used his car to run all of his errands in exchange for food and other necessities. Following a divorce earlier that year, the insured’s husband gave her a truck pursuant to a court order, but the insured preferred to drive Camden’s car. At times, the insured parked the car at her house and drove it while Camden was out of town. When asked whether she drove the car daily, the insured replied: “Regularly, but maybe not a daily basis, but regularly.”
As a result of the accident, Purvis’s passenger, Anthony Bonner, sustained injuries and subsequently sued the insured. The insurer filed a declaratory judgment action seeking a ruling that it was not obligated to defend the insured because Camden’s car was available to the insured for her regular use and was thus excluded from coverage. The trial court denied the insurer’s motion for summary judgment.
The Georgia Court of Appeals reversed since the purpose of the “non-owned regular use provision is to cover occasional or incidental use of other cars without the payment of an additional premium, but to exclude the habitual use of other cars, which would increase the risk on the insurance company without a corresponding increase of the premium.” The covered use has also been described as “casual” and “infrequent,” while “regular use” has been held to suggest a “principal (though not necessarily exclusive) use.” Applying this reasoning and definition, the Court held that the insured, by her own admission, regularly used Camden’s car. Therefore, the insurer was not obligated to defend the insured.
For more information, please contact Denny Brown at (404) 633-9230.
