California Court Holds Car Accident Victims Cannot Recover from Negligent Driver’s Automobile Insurer Due to Teenager’s Regular and Exclusive Use of Non-Covered Vehicle

In a recent case before the California Court of Appeal, the court addressed whether an insurance policy exclusion applied in a case of a regularly used non-covered vehicle. Typically, insurance policies provide coverage for non-owned, occasionally used vehicles.  Most policies exclude coverage for the regular use of vehicles not included in the policy.  This exclusion, deemed the “regular use” exclusion, prevents the insured from driving two cars and only maintaining insurance coverage for one car.  In this case, the court considered the policy implications of excluding coverage for the victims of an automobile accident caused by a teenage driver of an uninsured vehicle.

Simone Lionudakis, 17 years old, was driving a GMC pickup truck owned and registered to her father when she was involved in a motor vehicle accident. The accident injured Aweia Shimon and Flora Shimon. The Shimons brought a personal injury lawsuit against Simone and her parents.  Simone’s parents were separated.

Simone’s father had excluded her from his insurance policy in order to save money, even though Simone was the only driver of the GMC.  Simone’s mother had insurance through Nationwide Mutual Insurance, but she did not have coverage for the GMC. The Nationwide policy provided coverage for the use of a non-owned vehicle, provided that the vehicle was not furnished or available for regular use.

An agreement was reached in a settlement, with the terms that the court would address whether there was insurance coverage for Simone under her mother’s Nationwide Mutual Insurance auto policy. Nationwide then filed a declaratory relief action. The trial court found that GMC was available for Simone’s regular use, and coverage was therefore excluded. They entered a declaratory judgment in favor of Nationwide against the Shimons.  On appeal, the Shimons contended that the vehicle was not available for Simone’s use at the place and time of the car accident because Simone had disobeyed the parental restrictions on her use of the vehicle.

The exclusion of coverage for the regular use of vehicles that are not included in a policy prevents the insured from driving more than one car for the price of one policy. While coverage often extends to the occasional use of non-owned cars, it does not include the regular use of other cars. The court stated that preventing abuse is a factor in determining whether an exclusion from coverage applies.

In this case, the GMC was Simone’s vehicle, but it was not insured. Simone had her own key, and she was the only driver, with her mother possibly driving it once or twice. The vehicle was for her exclusive use.  The court stated that Simone used the GMC at the time of the accident, and this was not a causal or incidental use.  Her use was exclusive, for an unlimited period of time, and for an unlimited purpose. The fact that she disobeyed her parents does not make the insurance “regular use” exclusion inapplicable.

The Shimons argued that Simone had restrictions on her use and that she should not have been driving the GMC at the time of the accident. In support, the Shimons cited case law in which the determination of whether a vehicle is furnished or available for regular use depends on the time, purpose, and place of the use. The court distinguished those cases based on the fact that here Simone was the exclusive user of the car.

The court stated that in this case, the father’s decision to exclude the GMC from his insurance policy to save money was the type of abuse the exclusion in the policy is meant to prevent. The court affirmed the judgment of the lower court, holding that the insurance policy excluded coverage of the accident.

The experienced car accident attorneys at Sharifi Firm have years of experience representing Southern California clients seeking compensation from insurance companies. Call us today for a free consultation at 866-422-7222.

More Blog Posts:

California Court Limits Insurance Coverage When One Collision Was Proximately Caused by Two Negligent Acts, Southern California Injury Lawyer Blog, November 30, 2015

California Court of Appeal Rejects Insurance Policy “Resident Exclusion” Denying Recovery to Car Accident Victim, Southern California Injury Lawyer Blog, October 22, 2015

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