Regular use exclusion inapplicable to preclude coverage where doing so would frustrate public policy.
The insured was in the rear of an ambulance, owned by her employer, at the time of an automobile accident. The ambulance was insured under a Maryland policy that provided $2,500 in personal injury protection coverage, which was less than the amount required by Delaware law. The insured’s personal insurer, State Farm, refused to pay her PIP benefits, claiming that the regular use exclusion in her policy precluded coverage. The court determined that the insured did have regular use of the vehicle. However, this court found that the insured was not adequately compensated because the Maryland policy benefits were less than Delaware law required; therefore, to apply the “regular use” exclusion would frustrate 21 Del. C. § 2118 (which strives “to ensure that injured parties are fully and promptly compensated regardless of fault”), and to be upheld, an exclusion cannot be inconsistent with the requirements of § 2118.
Case Law Alert, 1st Quarter 2014