UNLISTED RESIDENT DRIVER EXCLUSION ENFORCEABLE UNDER PENNSYLVANIA LAW
Kevin L. Connors
Recently, the Pennsylvania Supreme Court upheld the enforceability of an unlisted resident driver exclusion (“URDE”) as being consistent with the Pennsylvania Motor Vehicle Financial Responsibility Law, as well as with the public policy considerations behind the PMVFRL.
The particular policy in question had been issued by Safe Auto Insurance, and the exclusion applies to a driver, who might be living with the insured, that is not related to the insured, and the driver is not listed under the insurance policy as an Additional Insured, with the Pennsylvania Supreme Court concluding that the unlisted driver is not entitled to be covered under the insurance policy as an insured.
This case arose in the case of Safe Auto Insurance Company v. Oriental-Guillermo, involving a car accident, in which the policyholder’s live-in girlfriend was driving the insured vehicle, although the girlfriend was not identified as an Additional Insured on the policy, and was also not “related to” the insured, resulting in Safe Auto denying coverage on grounds that:
- The girlfriend was not identified as an Additional Insured on the policy; and,
- The girlfriend was not related to the insured.
In so holding, the Pennsylvania Supreme Court determined that the PMVFRL had been enacted with the intent to combat rising insurance premium costs, as well as to address an influx of uninsured motorists.
The law’s purpose allows policyholders to opt into or out of protection mandated under the law, in order to enjoy lower, and, therefore, more affordable premiums, with the insured being able to determine what protections, over and above the minimum coverages required by law, that the insured would elect to purchase, i.e., coverage become ala carte, in terms of tort elections,
The law’s purpose allows policyholders to opt into or out of protection mandated under the law, in order to enjoy lower, and, therefore, more affordable premiums, with the insured being able to determine what protections, over and above the minimum coverages required by law, that the insured would elect to purchase, i.e., coverage become ala carte, in terms of tort elections, stacking privileges, as well as what vehicles and what drivers will be listed as being insured under the policy.
In effect, a requirement of the PMVFRL is that the policyholder bears the responsibility for insuring that individuals permitted to drive company-insured vehicles are, in fact, insured under the vehicle owner’s policy, or that the driver is insured under their own personal automobile insurance policy.
In this particular case, the Court went to great lengths to point out the striking exclusion, such that the very one that was issued, that allowed for significant cost-shifting to non-related individuals, all seeking insurance coverage through a single resident’s policy, without incurring significant premium increases.
In a dissenting opinion, Justice Weecht, argued and cautioned that Pennsylvania Courts, attempting to define the intent behind legislation, when interpreting what would otherwise appear to be the plain language of those laws, can sometimes be overreaching in its analysis and interpretation, implying legislative attempt that may or may not have been considered at the time of legislative enactment.
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