Encompass Indemnity Company, et al. v. Richard Tryon, et al., 2014-SC-000354 & 2014 SC-000357, 502 S.W.3d 585 (Ky.2016)
Bill Orberson and Tricia Le Meur successfully pursued an appeal of a Court of Appeals decision requiring Encompass to provide coverage for injuries arising from the Plaintiff’s use of a motorcycle that he insured with a different company. The plaintiff in this case separately insured his vehicles, two cars and a motorcycle, with three different insurance companies. He was injured while riding his motorcycle and sought underinsured motorists (UIM) from all three insurers. Encompass, which insured one of the plaintiff’s cars, disputed coverage based on its clear policy provision excluding UIM coverage for the plaintiff’s use of another vehicle owned by him but not insured under the Encompass agreement (typically referred to as a “regular use exclusion”). Kentucky’s Supreme Court, reversed the Court of Appeals, holding that UIM coverage exclusions such as this are permissible under Kentucky law. Specifically with respect to Encompass, the Court held that its UIM regular use exclusion was “a clear and unambiguous statement that the policy does not pay benefits for vehicles it does not insure,” and that the plaintiff did not have any reasonable expectation of coverage for his motorcycle accident from his Encompass policy insuring only his car.