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H.B. 423 Enrolled

                 

MOTOR VEHICLE LIABILITY COVERAGE

                 
2000 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Greg J. Curtis

                  AN ACT RELATING TO MOTOR VEHICLES; AMENDING MOTOR VEHICLE LIABILITY
                  COVERAGE EXCLUSION PROVISIONS.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                  AMENDS:
                      31A-22-303, as last amended by Chapter 192, Laws of Utah 1999
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 31A-22-303 is amended to read:
                       31A-22-303. Motor vehicle liability coverage.
                      (1) (a) In addition to complying with the requirements of Chapter 21 and Part II of Chapter
                  22, a policy of motor vehicle liability coverage under Subsection 31A-22-302 (1)(a) shall:
                      (i) name the motor vehicle owner or operator in whose name the policy was purchased,
                  state that named insured's address, the coverage afforded, the premium charged, the policy period,
                  and the limits of liability;
                      (ii) (A) if it is an owner's policy, designate by appropriate reference all the motor vehicles
                  on which coverage is granted, insure the person named in the policy, insure any other person using
                  any named motor vehicle with the express or implied permission of the named insured, and, except
                  as provided in Subsection (7), insure any person included in Subsection (1)(a)(iii) against loss from
                  the liability imposed by law for damages arising out of the ownership, maintenance, or use of these
                  motor vehicles within the United States and Canada, subject to limits exclusive of interest and costs,
                  for each motor vehicle, in amounts not less than the minimum limits specified under Section
                  31A-22-304 ; or
                      (B) if it is an operator's policy, insure the person named as insured against loss from the
                  liability imposed upon him by law for damages arising out of the insured's use of any motor vehicle
                  not owned by him, within the same territorial limits and with the same limits of liability as in an
                  owner's policy under Subsection (1)(ii)(A);


                      (iii) except as provided in Subsection (7), insure persons related to the named insured by
                  blood, marriage, adoption, or guardianship who are residents of the named insured's household,
                  including those who usually make their home in the same household but temporarily live elsewhere,
                  to the same extent as the named insured and the available coverage of the policy may not be reduced
                  to the persons described in this Subsection (1)(a)(iii) because:
                      (A) a permissive user driving a covered motor vehicle is at fault in causing an accident; or
                      (B) the named insured or any of the persons described in this Subsection (1)(a)(iii) driving
                  a covered motor vehicle is at fault in causing an accident; and
                      (iv) cover damages or injury resulting from a covered driver of a motor vehicle who is
                  stricken by an unforeseeable paralysis, seizure, or other unconscious condition and who is not
                  reasonably aware that paralysis, seizure, or other unconscious condition is about to occur to the
                  extent that a person of ordinary prudence would not attempt to continue driving.
                      (b) The driver's liability under Subsection (1)(a)(iv) is limited to the insurance coverage.
                      (2) (a) A policy containing motor vehicle liability coverage under Subsection
                  31A-22-302 (1)(a) may:
                      (i) provide for the prorating of the insurance under that policy with other valid and collectible
                  insurance;
                      (ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;
                      (iii) if the policy is issued to a person other than a motor vehicle business, limit the coverage
                  afforded to a motor vehicle business or its officers, agents, or employees to the minimum limits under
                  Section 31A-22-304 , and to those instances when there is no other valid and collectible insurance
                  with at least those limits, whether the other insurance is primary, excess, or contingent; and
                      (iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other than the
                  motor vehicle business or its officers, agents, or employees to the minimum limits under Section
                  31A-22-304 , and to those instances when there is no other valid and collectible insurance with at least
                  those limits, whether the other insurance is primary, excess, or contingent.
                      (b) (i) The liability insurance coverage of a permissive user of a motor vehicle owned by a
                  motor vehicle business shall be primary coverage.

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                      (ii) The liability insurance coverage of a motor vehicle business shall be secondary to the
                  liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).
                      (3) Motor vehicle liability coverage need not insure any liability:
                      (a) under any workers' compensation law under Title 34A;
                      (b) resulting from bodily injury to or death of an employee of the named insured, other than
                  a domestic employee, while engaged in the employment of the insured, or while engaged in the
                  operation, maintenance, or repair of a designated vehicle; or
                      (c) resulting from damage to property owned by, rented to, bailed to, or transported by the
                  insured.
                      (4) An insurance carrier providing motor vehicle liability coverage has the right to settle any
                  claim covered by the policy, and if the settlement is made in good faith, the amount of the settlement
                  is deductible from the limits of liability specified under Section 31A-22-304 .
                      (5) A policy containing motor vehicle liability coverage imposes on the insurer the duty to
                  defend, in good faith, any person insured under the policy against any claim or suit seeking damages
                  which would be payable under the policy.
                      (6) (a) If a policy containing motor vehicle liability coverage provides an insurer with the
                  defense of lack of cooperation on the part of the insured, that defense is not effective against a third
                  person making a claim against the insurer, unless there was collusion between the third person and
                  the insured.
                      (b) If the defense of lack of cooperation is not effective against the claimant, after payment,
                  the insurer is subrogated to the injured person's claim against the insured to the extent of the payment
                  and is entitled to reimbursement by the insured after the injured third person has been made whole
                  with respect to the claim against the insured.
                      (7) A policy of motor vehicle liability coverage under Subsection 31A-22-302 (1) may
                  specifically exclude from coverage a person who is a resident of the named insured's household,
                  including a person who usually makes his home in the same household but temporarily lives
                  elsewhere, if:
                      (a) at the time of the proposed exclusion, each person excluded from coverage satisfies the

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                  owner's or operator's security requirement of Section 41-12a-301 , independently of the named
                  insured's proof of owner's or operator's security[.];
                      (b) the named insured and the person excluded from coverage each provide written consent
                  to the exclusion; and
                      (c) the insurer includes the name of each person excluded from coverage in the evidence of
                  insurance provided to an additional insured or loss payee.
                      (8) A policy of motor vehicle liability coverage may limit coverage to the policy minimum
                  limits under Section 31A-22-304 if the insured motor vehicle is operated by a person who has
                  consumed any alcohol or any illegal drug or illegal substance if the policy or a specifically reduced
                  premium was extended to the insured upon express written declaration executed by the insured that
                  the insured motor vehicle would not be so operated.

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