In the recent case of Adamitis v. Erie Insurance Exchange, the Pennsylvania Superior Court enforced an insurer’s “Regular Use” exclusion despite the plaintiff’s argument that the provision violates public policy.
In early October 2005, plaintiff Adamitis was involved in a serious motor vehicle accident with an underinsured motorist while in the course and scope of his employment as a bus driver for the Berks Area Reading Transit Authority. As a result, Adamitis sought UIM coverage from Erie, but his claim was ultimately denied on the basis of a “Regular Use” exclusion which bars coverage for “bodily injury arising from the use of a non-owned motor vehicle or a non-owned miscellaneous vehicle regularly used by the insured” though not specifically identified in the policy. Unsurprisingly, Adamitis disagreed with his insurer’s coverage decision and brought suit against Erie in the Philadelphia Court of Common Pleas. The lower court, however, affirmed Erie’s decision in a bench trial citing the exclusion’s clear and unambiguous language.
On appeal, Adamitis argued to the Superior Court that, among other things, the “Regular Use” exclusion violates public policy and conflicts with the Motor Vehicle Financial Responsibility Law of Pennsylvania. However, the Superior Court was likewise unconvinced by Adamitis’ contention and instead explained that the public policy behind UIM benefits is driven by the correlation between premiums paid and the coverage the claimant should reasonably expect to receive— nothing more. Accordingly, the appellate court reasoned that failure to enforce the “Regular Use” exclusion would run afoul of Pennsylvania’s public policy by requiring insurers to underwrite unknown risks for which theyhave not been paid.
Thus, at least with respect to UIM insurance coverage, the Adamitis court reiterated that you get what you pay for in Pennsylvania.