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Court rejects Farmers Insurance Company exclusion based on car pool

Orleander Meadows bought Underinsured Motorist Coverage from Farmers Insurance Company.  It covered all the occupants in his vehicle, provided they were not being transported in a vehicle "for a charge."    The exclusion explicity did not render ineligible occupants who were participating in "share-expense car pools."  Johnetta Pugh was was later hurt in a car accident in Meadows' vehicle and applied for UIM benefits.  Farmers rejected her claim, arguing that her payment of approximately $20.00 per week, along with two co-workers, to contribute to gas and expenses ,rendered her a "for a charge" occupant ineligible for benefits.

The case went to mandatory arbitration and Farmers lost.  It appealed and the Circuit Court upheld the award.  Farmers then appealed to the Court of Appeals, where it was once again on the losing side this week.  The court agreed with the lower court that the evidence presented documented a "shared expense" arrangement, and not a commercial transport-for-hire.  The Court held that even though Pugh had never owned a vehicle or secured a driver license, she was participating with co-workers in a shared-expense arrangement.
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