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Email. . . EVEN THE SLIGHTEST RESTRICTION TO THE LIMITATION OF USE WILL GIVE RISE TO A DUTY TO DEFEND
Most auto policies provide an insured person coverage when driving another person’s vehicle with that person’s permission. There is however an exception to that rule. The exception is that the “non owned” vehicle must not be “available or furnished for the regular use” of the insured person. There have been two Nevada cases that have considered this issue. Let’s explore both.
The earlier case is Hartford Ins. Group v. Winkler, 89 Nev. 131, 508 P.2d 8 (1973). In that case, a couple was in the process of getting a divorce. The wife had left the husband and had moved in with her parents in Mesquite, Nevada. During the pendency of the divorce she remained as a named insured on the automobile policy held by her husband. However, when living with her parents, she would occasionally drive her parents’ car. The opinion suggested that the insured seldom used the car. There was only one key to the car. If the wife wanted to use the car she had to obtain her parents’ permission.
The Nevada Supreme Court looked to other states for the definition of the term regular. First they looked at the case of Motorists Mutual Ins. Co. v. Sanford, N.E.2d 596, 597 (Ohio App. 1966) that defined the word regular as meaning “constant, systematic . . . steady and methodical.” The court also looked at a definition from Arizona from the case of Travelers Indemnity Co. v. Hudson, 488 P.2d 1008, 1012 (Ariz. App. 1971) which identified the phrase “regular use” as a term that denotes “continuous use; uninterrupted normal use for all purposes; without limitation as to use; and customary use as opposed to occasional use or special use…”.
In the end, the Nevada Supreme Court upheld the jury’s decision that the parent’s car was not available for the wife’s regular use. Hartford had to indemnify the wife for injuries that she caused while driving her parent’s car.
The more recent case is Allstate Ins. Co. v. Larimer, 433 F.Supp.2d 1195 (2005). In the Allstate case, the driver was the son of the insured. His parents were divorced and he lived at both houses. The boy’s mother had given him a car on his sixteenth birthday and she provided insurance for the car. However, in injured parties sought recovery from the father’s insurance as well.
The father’s insurance filed for declaratory relief seeking to avoid a duty to defend and indemnify the son. Allstate made the argument that the car was available for the boy’s “regular use” and therefore, it should not have to defend or indemnify the son.
Allstate argued facts to demonstrate regular use. The mother did not use the car except to get it smogged and registered. The son drove the car to and from school and sports practice on a daily basis. He drove to friend’s houses, ran errands and attended sporting events, the mall and other recreational activities.
On the other hand, the claimants argued that the car was not available for the boy’s regular use because the mother imposed restrictions. She threatened to take away the car if he did not follow the rules. He had to check with his mom any time he wanted to use the car. He could not drink and drive. He was not supposed to have friends in the car and he could not use his cellular phone as he drove. He also had responsibility to wear his seat belt. He also had a curfew and travel restrictions.
Using the definition of “regular use” found in the Hartford case, the court found that the allegation of coverage was enough to obligate Allstate to provide a defense to the boy. Ultimately, the court would not say if the son’s use of the car constituted “regular use” so the question of whether Allstate had to indemnify was left to the trier of fact.
In summary, whether a non-owned vehicle is available for an insured’s regular use will most likely be a question of fact for a jury. But even a hint of restriction on the use will likely give rise to a duty to defend.
If you have question on coverage on non-owned vehicle, please contact us at Mills & Associates and we will do our best to help you with those questions.
