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What Is a 'Private Motor Vehicle'? Insurance Industry Test Case

Insurance cover under many motor policies is restricted to private vehicles which are used for social, domestic or pleasure purposes only – but what exactly does that mean? The High Court has provided an authoritative answer to that question.

The case concerned a security guard who had been working overnight at a hotel. On completing his shift, he agreed to pick up a friend on his way home and drive him back to the town where they both lived. During the journey, he collided with another vehicle, the driver of which was gravely injured.

The car the guard usually drove – a Ford Focus – was insured by EUI Limited, trading as Elephant Insurance. However, at the time of the accident, that vehicle was in a garage undergoing repair and he was driving a courtesy car – a Vauxhall Astra – provided to him by the garage. The Astra was insured by AXA Insurance UK Limited.

AXA launched proceedings against Elephant, arguing that the guard was insured under both policies when the accident occurred and that Elephant was therefore liable to pay an equal share of any liability arising in respect of the injured driver. Elephant denied any such liability.

Ruling on the matter, the Court noted that the Elephant policy covered the guard to drive cars other than the Focus. However, that cover was explicitly restricted to his use of private motor vehicles for social, domestic and pleasure purposes. The case therefore hinged on whether the courtesy car fell within that category.

The Court found that the essential purpose of the guard's journey was to drive home from work. The fact that he picked up a friend on the way could be seen as a social purpose, but it did not change the fundamental character of the trip. The journey was excluded from cover under the Elephant policy in that its essential purpose was related to the guard's work or business.

The courtesy Astra could also not be described as a private motor car. Emblazoned with the garage's advertising logo, it was very much a part of the garage's business and had been provided to the guard in the course of its trade. In extending cover to the guard when he drove cars other than the Focus, the purpose of the Elephant policy was to enable him, on an ad hoc basis, to drive family's or friends' cars which were covered only by 'named driver' policies. The Court concluded that Elephant bore no liability in respect of the accident.

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