Ohio Casualty Ins. v. Travelers Indemnity Co.

Herbert, J. This appeal involves the proper meaning of the term “regular use,” as used in appellant’s garage insurance policy issued to Greenwood Auto. Appellant contends that this court should be guided by past decisions in which a use was found to be “regular” if it was frequent, steady or constant over a substantial period of time. See Kenney v. Employers’ Liability Assurance Corp. (1966), 5 Ohio St. 2d 131, 214 N. E. 2d 219; Oberdier v. Kennedy Ford (1970), 23 Ohio App. 2d 168, 261 N. E. 2d 348; Motorists Mutual Ins. Co. v. Sandford (1966), 8 Ohio App. 2d 259, 221 N. E. 2d 596. However, the above cases dealt with the phrase as used in a family insurance policy. It is our conclusion that a like criterion would be improper when construing the meaning of the term in a garage insurance policy. [97] Family automobile policies often contain a clause excluding coverage for sums the insured is obligated to pay which result from driving a non-owned vehicle furnished to him for his regular use.1 One purpose of such an exclusion is to protect the company from a situation where an insured purchases one automobile, acquires liability insurance thereon, and then uses that protection while continually operating non-owned vehicles for which no premium has been paid.2 Lumbermens Mut. Cas. Co. v. Pulsifer (Me. S. D. 1941), 41 F. Supp. 249; George B. Wallace Co. v. State Farm Mut. Auto. Ins. Co. (1960), 220 Ore. 520, 349 P. 2d 789. Additionally, however, it is known that insureds often drive non-owned vehicles on trips where driving chores are shared, or around town for short trips in a friend’s or relative’s car. Hence, the construction placed upon the term “regular use” in family policies is quite favorable to the insured. Although some benefit also derives to the insurer, the affording of protection to the insured during occasional or incidental use of non-owned cars is significant.3 [98] The purpose of the “regular use” coverage in a garage insurance policy differs from the purpose of such coverage in a family policy. The garage type ©f policy is obtained, in part, by an automobile agency, service station or repair shop to provide coverage for those vehicles used in their business. In a business, such as a repair garage or agency, it is not only foreseeable, but common practice that automobiles are loaned to customers, or potential customers. The insurer offers the “regular use” provision in a garage policy to implement the intent to protect the insured from liability in circumstances involving a loaned vehicle. This interpretation is also consistent with the risks the insurer should be expected to assume, since in a garage policy, unlike a family policy, the insured pays a specific premium for the “regular use” coverage. Additionally, the ambiguity of the policy supports a construction favorable to the insured. In light of the above factors, we construe the term “regular use,” in this garage policy, to provide coverage of loaned automobiles when used within the scope of the permission given by the insured.4 Where a garage liability policy provides coverage for automobiles “furnished for the use of * * * any person or organization to whom the named insured furnishes automobiles for their regular use,” “regular use” is that use of the vehicle which is usual and customary for the person for whose use the automobile was furnished. This meaning allows for coverage the in [99] siired reasonably expects under the policy, and is consistent with the limitation on “regular use” coverage in appellant’s policy. In the ease at bar, Greenwood Auto placed no conditions on the use that Thomas Berry, Jr., was to make of the automobile during the time it was loaned to him. The ear was loaned to Berry for his usual and customary use and, therefore, the insured furnished the loaner for Berry’s regular use within the terms of the policy. The judgment of the Court of Appeals is affirmed. Judgment affirmed. O’Neill, C. J., Stern and Celebrezze, JJ., concur. Corrigan, W. Brown and P. Brown, JJ., dissent. Footnotes [1] In the present case, the family policy issued by Ohio Casualty to Thomas Berry, Jr.’s father, in part, provides: “Part I—Liability “* * * rpQ pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of: “* * * bodily injury, sickness or disease * * *; “* * * arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile * * *. <<* * $ “Definitions—Under Part I: $ * “* * * ‘non-owned automobile’ means an automobile or trailer not owned or furnished for the regular use of either the named insured or any relative * * (Emphasis added.) [2] It was agreed during oral argument that although no premiums are paid for “regular use” coverage in a family policy, premiums are paid for such coverage in a garage policy. [3] A contract of insurance which is ambiguous is generally construed in favor of the insured. Allstate Ins. Co. v. Boggs (1971), 27 Ohio St. 2d 216, 271 N. E. 2d 855; Butche v. Ohio Cas. Ins. Co. (1962), 174 Ohio St. 144, 187 N. E. 2d 20; Home Indemnity Co. v. Plymouth (1945), 146 [98] Ohio St. 96, 64 N. E. 2d 248. The College Dictionary, Kandom House (1978), defines “regular” as meaning both “usual, normal, customary,” and “recurring at fixed or uniform intervals.” [4] Appellant’s policy, in part, states: “Persons insured—Each of the following is an insured under Part I, except as provided below: “(4) With respect to an automobile to which the insurance applies under paragraph 1(b) of the Automobile Hazards, any person while using such automobile with the permission of the person or organization to whom such automobile is furnished, provided such person’s actual operation * * * is within the scope of such permission.” (Emphasis added.)