Section Review

The application of the regular use exclusion to Massachusetts bodily injury claims

Lloyd C. Rosenberg is a partner with the Plymouth law firm of Winokur, Serkey & Rosenberg PC, where he has practiced since 1979. He concentrates his practice representing plaintiffs in personal injury cases and has particular expertise in automobile insurance coverage matters. He has written articles and lectured frequently for the Massachusetts Academy of Trial Attorneys, Massachusetts Continuing Legal Education and the Massachusetts Bar Association. Since 2000, he has chaired the Auto Section of the Massachusetts Academy of Trial Attorneys.
The Massachusetts Appeals Court recently analyzed and redefined the scope of the regular use exclusion in Safety Insurance Company v. Day.1 The exclusion has mystified and stymied auto practitioners due to its elusive definition and conceptual framework. Even the Appeals Court acknowledged this confusion in noting, perhaps as an understatement, that the regular use exclusion “continues to present difficulties in its application to different factual situations. It may be that the concept cannot be defined more precisely, and so we look to the insurer’s underlying objective.”2 This article will focus on the application of the regular use exclusion to Part 5 (Optional Bodily Injury) claims since that is where it arises with the greatest frequency.3

The basic principle behind the exclusion is that an insurance policy is not intended to cover an insured against personal liability with respect to his use of another vehicle that he frequently uses or has the opportunity to use unless he pays an additional premium to his insurer for such use.4 Part of the confusion concerning the exclusion arises due to the fact that there is no specific definition of the term “regular use.”5 Under Part 5 of the Massachusetts Policy, the insurer “will pay damages to people injured or killed in accidents if you or a household member is legally responsible for the accident.”6 However, this section contains several exclusions to such coverage, including the following two that specifically refer to regular use:

In addition, we will not pay: …

2. For injuries resulting from an accident while a household member, other than your spouse, is using an auto which you or any household member owns or uses regularly, unless a premium for this Part is shown for that auto on the Coverage Selections Page.

3. For injuries resulting from an accident while you or your spouse, if a household member, are using an auto which you or your spouse, if a household member, own or use regularly unless a premium for this Part is shown for that auto on the Coverage Selections Page.

The rationale frequently cited in support of the exclusion is that it is intended “to prevent a situation in which the members of one family or household may have two or more automobiles actually or potentially used interchangeably but with only one particular automobile insured.”7

When does the regular use exclusion arise?

The factual components of a collision will determine the coverage options available to an injured plaintiff. In a typical two-car collision, where each party is the insured owner of the vehicle in question, one party is at fault and there are no other active liability factors (dram shop, vehicle defect, etc.), counsel for the injured party will determine the bodily injury coverage (usually Part 5) of the at-fault driver.8 The regular use exclusion does not arise in this factual context.

There are instances where the “at-fault” driver is permissively operating someone else’s car at the time of the collision, even though this driver also owns his own vehicle (or is a household member or spouse of another vehicle owner), which is not involved in the collision. In this instance, it is possible to reach both the bodily injury coverage of the “at-fault” motor vehicle and the bodily injury coverage of the “non-involved” vehicle. The two bodily injury policies can be added together or “stacked.”

The regular use exclusion acts in a manner to defeat the ability to stack the bodily injury coverage of the “non-involved” vehicle in certain circumstances. Essentially, it works as follows: if a person is permissively using someone else’s car regularly and causes an accident, the injured person will be able to recover bodily injury benefits from the at-fault car but cannot recover from the at-fault driver’s own auto policy (or that of a household vehicle of the at-fault driver) for additional bodily injury benefits, unless a premium is paid for coverage of the at-fault motor vehicle in the owner’s or household member’s policy.

In order to analyze whether the exclusion arises, one needs to address the following questions:

1. Did the “at-fault” driver permissively operate a motor vehicle owned and insured by someone else?

As noted above, if the answer is “yes,” the injured person will be able to collect benefits under the bodily injury coverage for this motor vehicle.

2. Did the “at-fault” driver own his/her insured motor vehicle at the time of the collision or, was the “at-fault” driver a household member (including, but not limited to, the spouse) of someone else who owned his/her insured motor vehicle at the time of the collision?

If the answer to either subpart of this question is “yes,” then the following question needs to be answered to determine whether additional bodily injury coverage is available to the injured person under the owner’s or household member’s policy.

3. Did the “at-fault” driver regularly use the “at-fault” motor vehicle?

If the answer is “no” (the driver did not regularly use the “at-fault” motor vehicle), then there is additional bodily injury coverage available to the injured person. If the answer is “yes” (the driver did regularly use the “at-fault” motor vehicle), then the following question needs to be answered.

4. Did the owner or household member list the “at-fault” car and pay a premium to his or her own auto insurer for the “at-fault” car?

If the answer is “yes” (it’s doubtful anyone ever does this), then there is additional coverage available. If “no,” the regular use exclusion applies and there is no additional coverage available.

Application of the regular use exclusion prior to Day

Prior to Day, there were two basic types of “use” that covered motor vehicle operation: incidental or occasional use, which did not trigger the exclusion, and habitual or frequent use, which did trigger the exclusion.

Turner involved the application of the exclusion to an “at-fault” girlfriend driver who was permissively operating her boyfriend’s car. On the date of the collision, she lived at home with her parents and, therefore, was by definition considered a “household member” under her parent’s auto policy, which was issued by Aetna. The injured party was able to obtain coverage from the “at-fault” car that was driven by the girlfriend and, additionally, sought coverage under the Aetna policy.

For almost one and one-half years prior to the accident, she had been living with her boyfriend and had been using his car three times a week for transportation to and from work, for errands and to take their son to day care. Approximately one month before the collision, she returned to live home with her parents. However, up to the time of the accident, she continued to ride to work with her boyfriend as a passenger and she drove his car once a week. The night before the accident, the boyfriend loaned her his car overnight. She was driving their son to day care when the collision occurred.

The boyfriend’s car was not listed on the parents’ policy and no additional premium was paid to Aetna for the boyfriend’s car. Aetna denied coverage and asserted application of the regular use exclusion.

The Appeals Court, in reversing the trial court, which had found the use was “occasional and incidental,” held that the regular use exclusion applied. The court followed the reasoning outlined in Galvin in noting that “[t]he policy is not intended to cover the insured against personal liability with respect to his use of another automobile which he frequently uses or has the opportunity to use.”9 The Turner court also referred to a First Circuit case that noted, in applying New Hampshire law, that “‘[r]egular use’ requires ‘sufficiently frequent, systematic or authoritative [use] as to [make] it reasonable for an insurer to expect an extra premium to insure an additional car.’”10

Four significant factors were relied upon by the Turner court in upholding the application of the regular use exclusion: 1) the girlfriend/daughter rode to work as a passenger with her boyfriend and, according to the court, this constituted “use”; 2) she operated her boyfriend’s car once a week; 3) she had no car of her own; and 4) she did not use her parents’ car. The use of her boyfriend’s car was deemed “frequent and systematic” as either a passenger or an operator. According to the court, the daughter used her boyfriend’s vehicle “exclusively to perform her required daily routine” and this use was “habitual” and “periodic.” Therefore, the regular use exclusion applied.11

The application of the exclusion to an entirely intra-family factual situation was analyzed in RLI Insurance Co. v. Hanover Insurance Co.12 The “at-fault” son was permissively operating his father’s motor vehicle and seriously injured his passenger. The son did not own his own car at the time of the accident. The injured passenger recovered bodily injury benefits from the “at-fault” motor vehicle insurance policy and additional benefits from an umbrella policy purchased by the father. The umbrella carrier, RLI, argued that contribution was due from an insurance policy issued by Hanover to the mother covering two household that were not involved in the accident. The father’s car was not listed as an additional insured vehicle in the mother’s policy.

The son was an out-of-state college student home on a three-week winter break when the accident occurred. Prior to the break, he had been using one of his mother’s cars but left it in Florida. While he was home on break, he used another car owned by both his mother and father to commute to work during the day. He used his father’s car at night. During his break from school, either the jointly owned parental car or the father’s car, which was the one involved in the accident, was always available for use by the son. When he was home during the previous summer and winter breaks, the son and his sister used either the father’s car or one of the mother’s cars.

The court cited the same basic principles outlined in Turner and concluded use by the son fell within the regular use exclusion. During several years while the son stayed at his parents’ home during summer and winter breaks he had “blanket permission” to use his father’s car whenever he wanted, and the father’s car was one of three vehicles always available to him during the break that the accident occurred. The court held that “on the basis of the history of the availability” of the father’s car “as well as his habitual and periodic use of that car, Hanover could reasonably have expected to be paid an extra premium for the insurance.”13

The impact of Day on the
regular use exclusion

In Day, the defendant, Ann B. Day, was driving a car owned by her housemate, Donna Enberg.14 Day was “at fault” in colliding with a motor vehicle owned by Noreen Mahan, who was seriously injured. Enberg’s “at-fault” vehicle was insured by Trust Insurance Co. with bodily injury coverage of $100,000. Day owned a separate vehicle insured by Safety, which was not involved in the collision, which had $250,000 of bodily injury coverage. Mahan attempted to recover bodily injury benefits from both policies. Trust paid its $100,000 bodily injury limit for the “at-fault” car. Safety refused to pay, citing the regular use exclusion.

Day primarily used her own vehicle for travel. Her use of Enberg’s vehicle prior to the collision was characterized as follows:

1. Day permissively used Enberg’s vehicle two or three times per month for trips out of town;

2. About two times per month, Enberg would drive her car and transport Day as a passenger to Day’s out-of-town meetings; and

3. Day would occasionally use Enberg’s vehicle for local purposes.

Day always informed Enberg when she wanted to use the car and anticipated Enberg’s permission unless Enberg was using her car. On the day of the accident with Mahan, Safety insured Day under the standard Massachusetts Automobile Insurance Policy, Sixth Edition, which contained an exclusion “for injuries resulting from an accident while you or a household member is using an auto which you or any household member owns or regularly uses, unless a premium for this Part [5] is shown for that auto on the Coverage Selections Page.”15

Both parties filed for summary judgment. The motion judge acknowledged that “the issue is close” and determined that the regular use exclusion did not apply. The Appeals Court reversed and held that the exclusion applied to the Safety policy.16

The Appeals Court acknowledged the basic underlying principles previously established in Turner, RLI and Volpe, including distinguishing between “occasional or incidental” use and “habitual use,” along with a recognition that “use” included both periodic operation of the vehicle as well as riding as a passenger. However, the court chose to completely depart from prior established precedent. Instead of deciding if the scales of use weighed in favor of “incidental” on one side or “habitual” on the other, the court determined that this case fell within a newly created “middle ground between the poles.” Under this newly created middle ground, the court defined a new test, specifically, “it is the consistency of use, coupled with at least some frequency of use that combine to determine whether regular use has occurred.”17

The first prong of this test, “consistency of use,” involves an inquiry into “whether there is a consistent pattern of use or availability of the other vehicle, thereby suggesting that the user relies on the likelihood that he will be permitted to use that vehicle at the times in question.”18 Under this prong, non-use of the vehicle can be considered a relevant factor. The “blanket permission” given to the son to use his father’s car in RLI was the equivalent of “the opportunity to use the vehicle on a regular basis.”19

Under the “some frequency of use” second prong, “a minimum level of frequency is a prerequisite as well.”20 The court failed to define what the minimum level is, although it noted, “[u]se once a year might be consistent, but it would presumably not constitute regular use.”21

It is entirely unclear why the Day court felt that this new “middle ground” test was needed in the first place since there was a sufficient factual basis for the court to have ruled in favor of the application of the regular use exclusion based upon previously established principles. Certainly the use, which included operating the car two or three times per month out of town, occupying the car twice a month as a passenger on out-of- town trips along with occasional local use could have been characterized as “frequent” or “habitual.”22

In addition to adopting this new regular use exclusion test, the Day court rejected certain factors that were previously deemed relevant in determining regular use. The Appeals Court noted that both Day and Enberg had their own separately insured vehicles. However, the court stated that “[w]e do not…view the fact that a driver has no insured vehicle of her own as a determinative factor.”23

Conclusion

The Day decision has greatly expanded the availability of the regular use exclusion as a means to deny “stacking” coverage in bodily injury claims. Before Day, in order for the regular use exclusion to apply, use had to be “habitual” or “frequent” or “sufficiently frequent, systematic or authoritative.” A denial can now be effective if there is only “consistency of use, coupled with at least some frequency of use” (emphasis added). The newly created “middle ground” is much less demanding on the insurer and will effectively supplant the previous standard, thereby resulting in more coverage denials to operators and passengers who have been seriously injured.

The possibilities are somewhat frightening. Say, for example, a parent with $250,000 of optional bodily injury coverage drives his own car 300 miles per week. He uses his child’s car with $20,000 of compulsory coverage once a weekend for ten minutes to drive one mile to the municipal dump. On one of these “dump runs,” the parent causes a serious accident. The injured person will be able to recover $20,000 under the bodily injury coverage of the child’s policy. When the injured party attempts to collect additional bodily injury coverage from the parents’ own carrier, as a result of Day, there could be a denial under the regular use exclusion. The carrier can argue that the use of the child’s car is consistent, with some frequency of use. It is highly doubtful the parent would have known that he or she should have included the child’s car as a covered vehicle on his own insurance policy. Such a result is highly inequitable.

Perhaps the problem with the regular use exclusion is not so much the difficulty “in its application to different factual situations,” noted in Day, but the arbitrary manner in which it interferes with the application of bodily coverage purchased and paid for by the policyholder. A person can only drive one car at a time. Risk of an accident is not greater if the actual car driven differs from one time to the next. If the insured driver borrows a car from one friend, once a month for 12 months, an insurer can claim that there is no coverage under the exclusion. However, if the insured driver borrows a car once a month from 12 different friends, the exclusion would not apply. Why should it make a difference in either instance as long as the use of the non-owned vehicle is inconsequential?

A clear distinction between the extremities of vehicular use should be maintained so that our courts can more easily sort through questions of fact that arise when analyzing regular use exclusion cases. Under the “principal use” test applied in California, for example, regular use “means principal use, as distinguished from a casual or incidental use.”24 Relevant elements that are considered include “time, place and manner of use, purpose or type of use, and restrictions on use.” Under this analysis, “a finding of no regular use would be supported by the facts where the car was used infrequently…or occasionally with the permission of the parent…or during the personal use of a car furnished mainly for business purposes.”25 Such a test is more equitable than the test established in Day and more in line with trying to determine the “the fair meaning of the language used, as applied to the subject matter.”26

End notes

1. 65 Mass. App. Ct. 15, 836 N.E.2d 339 (2005). [back]

2. Id. at 20. In construing insurance policy language, ambiguities are resolved against the insurer that drafted the policy and in favor of the insured. GRE Ins. Group v. Metro. Boston Hous., 61 F.3d 79, 81 (1st Cir. 1995). However, these rules are typically ignored in automobile policy interpretation cases. The rationale is that because the standard auto policy in Massachusetts is prescribed by statute and controlled by the Division of Insurance, traditional rules of construction resolving ambiguities are inapplicable. Instead, the court must ascertain “the fair meaning of the language used, as applied to the subject matter.” Bilodeau v. Lumbermens Mut. Cas. Co., 392 Mass 537, 541, 467 N.E.2d 137 (1984). It is unclear why the Appeals Court in Day chose to look to the insurer’s underlying objective instead of the fair meaning of the language.[back]

3. The “regular use” exclusion is currently contained in several sections of the Massachusetts Automobile Insurance Policy (Seventh Edition), including Part 4 (Damage to Someone Else’s Property), Part 5 (Optional Bodily Injury) and Part 6 (Medical Payments).[back]

4. Turner v. Aetna Cas. & Sur. Co., 36 Mass. App. Ct. 921, 923, 628 N.E.2d 29, 31 (1994).[back]

5. See Massachusetts Automobile Insurance Policy, Definitions at 2-3. [back]

6. “You” is defined in the Definitions section of the Massachusetts policy and “refers to the persons named in Item 1 of the Coverage Selections Page.”[back]

7. Galvin v. Amica Mut. Ins. Co., 11 Mass. App. Ct. 457, 458-59, 417 N.E.2d 34 (1981), quoting from 13 Couch, Insurance §. 45:1052 (2d ed. 1965). [back]

8. Plaintiff’s counsel should also determine whether there is any underinsured coverage (Part 12) available from the injured party’s own auto policy as well as personal injury protection (Part 2 ) and medical payments (Part 6) coverage.[back]

9. Turner, 36 Mass. App. Ct. at 923. [back]

10. Id. at 923, quoting Volpe v. Prudential Prop. & Cas. Ins. Co., 802 F.2d 1, 4 (1st Cir.1986). [back]

11. Id. [back]

12. 42 Mass. App. Ct. 913, 675 N.E.2d 1167 (1997). [back]

13. RLI, 42 Mass. App. Ct at 914. [back]

14. They were not related by blood or marriage and, therefore, were not considered “household” members under their insurance policy. Even if they were household members, the result would be the same under the regular use exclusion.[back]

15. The exclusion contained in the Sixth Edition, which was in effect through 1999, is contained on page 13 of the standard policy. In the Seventh Edition, effective January 2000, the regular use exclusion was expanded to cover the two sections referred to in the first section of this article. However, there is no material substantive difference between the Sixth and Seventh editions for purposes of the analysis under Day. [back]

16. The Appeals Court ruled against Safety on the entirely separate issue of estoppel. The Appeals Court ruled that: “After almost 2 years of assuming, reasonably, that she was covered, and then being informed for the first time that she might not be, Day could hardly be expected to assume the burden of the defense at that stage. Safety placed her in a position in which she had no choice but to rely on its defense of the case, and she incurred damage as a result.” Day, 65 Mass. App. Ct. at 24.[back]

17. Day, 65 Mass. App. Ct. at 22. [back]

18. Id. at 21. [back]

19. Id. (emphasis added). [back]

20. Id. at 21-22. [back]

21. Id. at 22.[back]

22. Turner, 36 Mass. App. Ct. at 923.[back]

23. Day, 63 Mass. App. Ct. at 22.[back]

24. Highlands Ins. Co. v. Universal Underwriters Ins. Co., 92 Cal.App.3d 171, 154 Cal. Rptr. 683 (1979), quoting Kindred v. Pacific Auto. Ins. Co., 10 Cal.2d 463, 465, 75 P.2d 69 (1938). [back]

25. Highlands, 92 Cal.App.3d at 175-76. [back]

26. Bilodeau v. Lumbermens Mut. Cas. Co., 392 Mass 537, 541, 467 N.E.2d 137 (1984).[back]

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