Pennsylvania Superior Court Approves the Use of Named Driver Only Insurance Policies
The Pennsylvania Superior Court has just approved the use of “Named Driver Only” insurance policies. Byoung Suk an v. Vict. Fire & Cas. Co., 2015 PA Super 84; 2015 Pa. Super. LEXIS 185, (2015). In this case, the insurance policy issued to the insured provided coverage only when he was driving the car. At the time of the accident, the vehicle was being driven by a friend of the insured’s teenage son. Instead of utilizing the “unauthorized driver” exclusion, the carrier invoked the “Named Driver Only” provision of the policy. The driver attempted to argue that the clause violated the Motor Vehicle Financial Responsibility Law (MVFRL). However, the Superior Court could not find any provision that required an insurance policy to identify as an insured anybody who was operating the vehicle. The court also found that the “Named Driver Exclusion” does not apply to this kind of coverage. Therefore, it did not impose on the carrier the same duties and evidentiary burdens an insurer would face when imposing a “Named Driver Exclusion.” Having dispensed with the statutory requirements, it was then fairly easy for the Superior Court to recognize this type of insurance policy as one which could lower premiums.
This case presented an easy scenario for the Appellate Courts to affirm the exclusion. The driver was not a relative and was also an inexperienced driver that did not get permission from the owner of the car to operate it. If you assume that the insured bought this policy because he did not want his teenage son operating his car, it stands to reason that he would not want his son’s teenage friend operating it either.
- Query: Would the Superior Court reach the same result if the driver were a spouse or resident relative?
- Query: Would the Superior Court reach the same result if the driver were the designated driver transporting their intoxicated insured home safely?
- Query: If these policies become common in the marketplace, will the tort of negligent entrustment be triggered simply by someone letting anybody but themselves drive their vehicle?
These answers are yet to be seen, but surely something we will find out in the future!