It’s certainly appropriate to consult with an attorney when an insurance
company tells you that the claim you made, under the insurance you purchased,
is not covered, but it is also important to remember that you can help
your own cause by paying for coverage in the first place. The case of
Nationwide Mutual Ins. Co. v.
Shimon (2015) (243 Cal. App. 4th 29.) points out that it certainly can be better
to just buy the insurance than to try to be creative afterwards.
Simone Lionudakis was a 17 year old, whose parents were divorced. She split
her time between her parents.
When Simone turned 16, her dad gave her keys to a GMC truck he owned. While
there were certain parameters on her driving, she drove the GMC “every
day.” No one else really used it.
Around the time Simone turned 17, her mother had her sign written rules
regarding the truck, providing, among other things: that there were to
be no passengers, no driving outside a certain area, Simone was to be
home right after school or school activities, and she was to call and
let her parents know about her plans with her friends and to ask permission
first. She continued to drive the GMC on a daily basis. Sometimes her
parents took her keys away, if she misbehaved, but this did not happen often.
A few months shy of her 18th birthday, Simone disobeyed and got into an accident. She wasn’t
supposed to be driving. Her mother had taken her keys away because of
her poor grades, so she took her dad’s keys, picked up a friend
and drove, without calling or asking for permission, to a pool hall in
Modesto. There, an inebriated patron asked her for a ride to Sonora (in
the Sierra foothills) and Simone agreed to take her for $100. The accident
happened on the way. Simone and her mother and father were sued.
This is where the creativity started.
It turns out that Simone’s dad, despite owning the truck and giving
her keys to it, excluded her on his insurance, to save money. Nationwide
was her mother’s insurance company. The Nationwide policy provided
coverage for a household family member’s use of a “non-owned”
vehicle, but not if the vehicle was furnished, or available for the family
member’s regular use. The court points out that this coverage is
meant to allow an insured to be covered for occasional use of a non-owned
vehicle, but the regular use provision is meant to prevent an insured
from regularly using a(nother) vehicle without paying additional premiums for it.
It would be a nice deal, of course, if Simone’s Dad did not have
to declare the teenager as a driver under his insurance, or pay premiums
for her, with her still obtaining coverage - as a household member of
Mom’s family - driving a “non-owned” (aka Dad’s)
vehicle, but that didn’t pan out. The parental restrictions here
did not prevent a finding of regular use, because, the appellate court
stated: Simone was not just the principal user of the GMC, she was the
exclusive user and her use was “far beyond occasional.” An
interesting side question, not answered in the case, is: how did Simone
show proof of insurance when she got her license?
Mark E. Hancock is an Attorney in Ventura, who handles personal injury
and insurance coverage cases, including ERISA appeals, for injured persons