Matthew Friedman, a college student, was driving his father's Mazda RX-7 when he was involved in an accident that resulted in serious injuries to his passenger. The car was listed on an automobile policy issued to his father by USF&G. The Friedman family had an umbrella policy from RLI Insurance Company and Hanover Insurance covered Matthew's mother. However, her auto policy listed two cars which had no involvement with her son's accident.

In a settlement between Matthew and his passenger, USF&G paid $250,000, the limits of its policy, and RLI contributed $500,000. (Editor's note: there are no details available regarding the liability limits provided by the umbrella policy). Hanover refused to contribute and relied upon its policy wording which excluded coverage for cars furnished "for (the) regular use" of any insured.

Hanover's policy exclusion provided that Hanover "will not pay for injuries resulting from an accident while you or a household member is using an auto which you or a household member owns or uses regularly, unless a premium . . . is shown for that auto on the Coverage Selections Page." The only cars listed on the Hanover policy were the mother's Datsun and her Plymouth.

Matthew stayed at his parents' home during his school vacations, and during those times he had his parents' blanket permission to use the RX-7 whenever he wanted. In fact, the RX-7 was one of three vehicles available to him during his 1987 vacation.

RLI contended that Hanover should contribute to the settlement and brought this action for declaratory judgment. The trial court ruled that since no premium had been paid to cover the RX-7 on his mother's policy, and since the policy plainly excluded unlisted cars which were regularly furnished for the use by insured members of the household, Hanover was not liable. RLI appealed.

The higher court ruled that the RX-7 was available for Matthew's regular use, and Hanover's policy excluded coverage under that circumstance. The judgment entered in the trial court was affirmed.

RLI Insurance Company v. The Hanover Insurance Company--No. 95-P-495--Appeals Court of Massachusetts--February 12, 1997--675 North Eastern Reporter 2d 1167.