In the case of Nationwide Affinity Ins. Co. of America v. Fong, the United States District Court for the Eastern District of Pennsylvania granted Nationwide Insurance Company’s Motion for Summary Judgment concerning a determination of rights and obligations under an automobile insurance policy.
Nationwide insured Angela and Kelvin Fong under a personal automobile insurance policy, which included underinsured motorists coverage. The Fong’s daughter, Jessica Fong, who resided with her parents at the relevant time, along with her husband, was included under the Nationwide policy as a “listed driver.”
The Nationwide policy included underinsured motorist coverage for accidents resulting in bodily injury to the policyholder or a relative. “Relative” was defined by the policy as “one who regularly lives in your household and who is related to you by blood, marriage or adoption .” However, the policy contained two exclusions to its underinsured motorists coverage: (1) the Regular Use Exclusion and (2) the Household Exclusion.
Under the Regular Use Exclusion, the underinsured motorists benefits excluded coverage for “bodily injury suffered while occupying a motor vehicle… owned by... or available for regular use of you or a relative, but is not insured for Auto Liability coverage under this policy.” Under the Household Exclusion, the underinsured motorists benefits excluded coverage for “bodily injury suffered while occupying a motor vehicle owned by the policy holder or a relative but not insured for Auto Liability coverage under this policy.”
Jessica was involved in a motor vehicle accident wherein she was operating a vehicle she owned and which she and her husband separately insured through Allstate Insurance Company. It was undisputed that Jessica owned the vehicle she was operating at the time of the accident and that it was available for her regular use. Allstate rejected Jessica’s claim for underinsured motorists coverage relating to that accident because Jessica and her husband had rejected underinsured motorists benefits under their Allstate policy. Jessica was pursuing a claim for underinsured motorists benefits through her parents’ Nationwide policy.
Nationwide filed this Declaratory Judgment Complaint seeking a determination of its rights and obligations under the policy. Jessica focused substantially on the argument that the policy’s Household Exclusion was unenforceable in light of the Pennsylvania Supreme Court’s holding in Gallagher v. GEICO Indem. Co., 201 A.3d 131 (Pa. 2019). In Gallagher, the Court determined that a household vehicle exclusion contained in a motor vehicle insurance policy violated § 1738 of the Pennsylvania Motor Vehicle Financial Responsibility Law because the exclusion acted as a de facto waiver of stacked uninsured and underinsured motorist coverage. Gallagher, 201 A.3d at 132. Nationwide argued that Gallagher did not apply because this case did not involve stacking, and the court agreed.
Turning to the Regular Use exclusion, the court noted that the record before it confirmed that Jessica’s claim under the Nationwide policy was for injuries that she suffered while occupying a motor vehicle that she owned, was available for her regular use, and was not insured under the Nationwide policy. It was however a vehicle listed under Jessica’s Allstate policy.
The court noted that the language of the regular use exclusion was not ambiguous and that the plain language of that exclusion clearly applied to bar coverage under the Nationwide policy for any UIM coverage to Jessica. The court noted that the regular use exclusion had been upheld by the Pennsylvania Supreme Court’s holding in the case of Williams v. Geico, 32 A.3d 1195, 1209 (Pa. 2011), in which it was held that the regular use exclusion was not void as against public policy
Notably, the court in this case also stated that the Pennsylvania Supreme Court’s separate decision with respect to the household exclusion in the case of Gallagher v. Geico did not affect Williams’s precedent, as the facts of Gallagher are wholly distinguishable to the facts in the instant matter, as the Defendants’ conceded this was not a “stacking” case.