Three Policies, One Motorcyclist
Devin, 22, lives with his parents and is a listed driver on their personal auto policy: liability 100/300/50, medical payments $5,000, UM/UIM 100/300. Devin also owns a pickup insured in his own name at 25/50/25. On Saturday he borrowed his friend Maya's car with her permission to help another friend move a couch. Turning left, he struck a motorcyclist: $85,000 in medical bills and $9,000 damage to the bike. Maya's policy is 25/50/25. Devin has also started a weekend furniture-delivery business and uses whichever vehicle is handy - that afternoon he made one paid delivery in Maya's car before the couch errand. Nobody has sorted out which policy pays what, and Maya's adjuster has already offered her $25,000 policy limit to the motorcyclist, who has not responded.
1. Set out the order in which the policies respond and the amount each pays for the injury and the bike.
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Step 1 - the owner's policy is primary. Maya's PAP covers any person using her covered auto with permission. Her 25/50/25 pays the per-person bodily injury limit of $25,000 and the full $9,000 property damage (inside the $25,000 PD limit).
Step 2 - Devin's own policies are excess. Devin is an insured under his parents' PAP (resident relative) and under his own PAP, and in both cases Maya's car is a non-owned auto - not furnished or available for his regular use. Non-owned auto coverage is excess over the owner's insurance.
Step 3 - the two excess policies share the $60,000 remainder ($85,000 − $25,000). Contribution is normally pro rata by limits: parents' $100,000 : Devin's $25,000 = 4:1.
- Parents' PAP: $48,000
- Devin's PAP: $12,000
The per-person limits ($100,000 and $25,000) are not exceeded, so nothing is left unpaid - but note the sequence matters: the liability excess pays before any UIM claim. The motorcyclist may also have a UIM claim against his own carrier for the gap between his UIM limits and the $85,000 collected, so do not release the file on the assumption that the loss is closed.
2. The motorcyclist's attorney argues the delivery makes the loss business-related. How does that change the analysis?
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The standard PAP excludes liability for that vehicle while used to carry persons or property for a fee (share-the-expense car pools excepted). If the accident happened while Devin was making the paid delivery - or on a trip substantially undertaken for the delivery business - both excess policies drop out. Maya's policy would still be primary, because her policy's obligation runs to the permissive user of her car and the exclusion is read against the person claiming coverage; but the $60,000 gap then falls on Devin personally.
If the delivery had already been completed and the couch errand was a genuinely separate personal trip, coverage is intact.
Practical handling:
- Pin down the trip's purpose with the delivery app's log, texts, timestamps and the friend's statement. The burden of showing the loss falls outside an exclusion is the insurer's; the burden of showing a vehicle is a covered auto is the insured's.
- Do not confuse this with the business use of a rated vehicle question - Devin's own pickup is unaffected, since he was not driving it.
- If the delivery business is real and recurring, the correct fix is a commercial auto policy or a business-use endorsement; advise the family in writing, because the next claim will be identical except for the receipt.
3. Suppose Devin had been keeping Maya's car at his apartment and driving it daily for a month while she was overseas. What changes?
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The excess layer disappears. Both the parents' PAP and Devin's own PAP define a non-owned auto to exclude a vehicle furnished or available for the regular use of you or any family member. A month of daily possession is the classic regular-use fact pattern, and the exclusion applies even though Devin owns no interest in the car and even if Maya gave permission.
The regular-use exclusion exists to stop insureds from buying one policy and rotating through a fleet of borrowed cars. It is not defeated by the owner's consent, by the absence of a written agreement, or by the car being titled elsewhere.
What survives:
- Maya's policy remains primary for the permissive driver. She is the named insured and her car is a covered auto; her carrier cannot use Devin's regular use as an excuse.
- Devin and his parents are left outside the excess layer, so the $60,000 gap is uninsured unless Devin buys his own coverage for the borrowed car.
Underwriting action: ask at each renewal and each newly added driver whether any non-owned vehicle is available for regular use, and note the answer in the file.