Posted By Mark E. Hancock || 29-Apr-2016

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 and insureds.

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