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S.B. 189

             1     

MOTOR VEHICLE INSURANCE POLICY

             2     
COVERAGE

             3     
2000 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Michael G. Waddoups

             6      AN ACT RELATING TO INSURANCE; AMENDING UNINSURED AND UNDERINSURED
             7      MOTORIST COVERAGE PROVISIONS.
             8      This act affects sections of Utah Code Annotated 1953 as follows:
             9      AMENDS:
             10          31A-22-305, as last amended by Chapter 158, Laws of Utah 1999
             11      Be it enacted by the Legislature of the state of Utah:
             12          Section 1. Section 31A-22-305 is amended to read:
             13           31A-22-305. Uninsured and underinsured motorist coverage.
             14          (1) As used in this section, "covered persons" includes:
             15          (a) the named insured;
             16          (b) persons related to the named insured by blood, marriage, adoption, or guardianship,
             17      who are residents of the named insured's household, including those who usually make their home
             18      in the same household but temporarily live elsewhere;
             19          (c) any person occupying or using a motor vehicle referred to in the policy or owned by
             20      a self-insurer; and
             21          (d) any person who is entitled to recover damages against the owner or operator of the
             22      uninsured or underinsured motor vehicle because of bodily injury to or death of persons under
             23      Subsection (1)(a), (b), or (c).
             24          (2) As used in this section, "uninsured motor vehicle" includes:
             25          (a) (i) a vehicle, the operation, maintenance, or use of which is not covered under a
             26      liability policy at the time of an injury-causing occurrence; or
             27          (ii) (A) a vehicle covered with lower liability limits than required by Section 31A-22-304 ;


             28          (B) the vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of the
             29      deficiency;
             30          (b) an unidentified vehicle that left the scene of an accident proximately caused by the
             31      vehicle operator;
             32          (c) a vehicle covered by a liability policy, but coverage for an accident is disputed by the
             33      liability insurer for more than 60 days or, beginning with the effective date of this act, continues
             34      to be disputed for more than 60 days; or
             35          (d) (i) an insured vehicle if, before or after the accident, the liability insurer of the vehicle
             36      is declared insolvent by a court of competent jurisdiction;
             37          (ii) the vehicle described in Subsection (2)(d)(i) is uninsured only to the extent that the
             38      claim against the insolvent insurer is not paid by a guaranty association or fund.
             39          (3) (a) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
             40      coverage for covered persons who are legally entitled to recover damages from owners or operators
             41      of uninsured motor vehicles because of bodily injury, sickness, disease, or death [in limits that at
             42      least equal the minimum bodily injury limits for motor vehicle liability policies under Section
             43      31A-22-304 ].
             44          (b) For new policies written on or after January 1, 2001, the limits of uninsured motorist
             45      coverage are equal to the limits of the insured's motor vehicle liability policy unless the insured
             46      purchases coverage in a lesser amount by signing an acknowledgment form provided by the insurer
             47      that:
             48          (i) waives the higher coverage;
             49          (ii) reasonably explains the purpose of uninsured motorist coverage; and
             50          (iii) discloses the additional premiums required to purchase uninsured motorist coverage
             51      with limits equal to the limits of the insured's motor vehicle liability policy.
             52          (c) Uninsured motorist coverage may not be sold with limits that are less than the
             53      minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304 .
             54          (d) The acknowledgment under Subsection (3)(b) continues for that issuer of the uninsured
             55      motorist coverage until the insured, in writing, requests different uninsured motorist coverage from
             56      the insurer.
             57          (e) In conjunction with the first three renewal notices sent after January 1, 2000, for
             58      policies existing on that date, the insurer shall provide notice to the insured that reasonably


             59      explains the purpose of uninsured motorist coverage and discloses the additional premiums
             60      required to purchase uninsured motorist coverage with limits equal to the limits of the insured's
             61      motor vehicle liability policy.
             62          (4) (a) (i) Except as provided in Subsection (4)(b), the named insured may reject uninsured
             63      motorist coverage by an express writing to the insurer that provides liability coverage under
             64      Subsection 31A-22-302 (1)(a).
             65          (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
             66      explanation of the purpose of uninsured motorist coverage.
             67          (iii) This rejection continues for that issuer of the liability coverage until the insured in
             68      writing requests uninsured motorist coverage from that liability insurer.
             69          (b) (i) All persons, including governmental entities, that are engaged in the business of,
             70      or that accept payment for, transporting natural persons by motor vehicle, and all school districts
             71      that provide transportation services for their students, shall provide coverage for all vehicles used
             72      for that purpose, by purchase of a policy of insurance or by self-insurance, uninsured motorist
             73      coverage of at least $25,000 per person and $500,000 per accident.
             74          [(i)] (ii) This coverage is secondary to any other insurance covering an injured covered
             75      person.
             76          [(ii)] (c) [This coverage does not apply to an employee, who is injured by an uninsured
             77      motorist, whose exclusive remedy is] Uninsured motorist coverage:
             78          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers' Compensation
             79      Act[.];
             80          (ii) may not be subrogated by the Workers' Compensation insurance carrier;
             81          (iii) may not be reduced by any benefits provided by Workers' Compensation insurance;
             82      and
             83          (iv) may be reduced by health insurance subrogation only after the covered person has
             84      been made whole.
             85          [(c)] (d) As used in this Subsection (4):
             86          (i) "Governmental entity" has the same meaning as under Section 63-30-2 .
             87          (ii) "Motor vehicle" has the same meaning as under Section 41-1a-102 .
             88          (5) When a covered person alleges that an uninsured motor vehicle under Subsection (2)(b)
             89      proximately caused an accident without touching the covered person or the vehicle occupied by


             90      the covered person, the covered person must show the existence of the uninsured motor vehicle
             91      by clear and convincing evidence consisting of more than the covered person's testimony.
             92          (6) (a) The limit of liability for uninsured motorist coverage for two or more motor
             93      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             94      coverage available to an injured person for any one accident.
             95          (b) (i) Subsection (6)(a) applies to all persons except a covered person as defined under
             96      Subsection (7)(b)(ii).
             97          (ii) A covered person as defined under Subsection (7)(b)(ii) is entitled to the highest limits
             98      of uninsured motorist coverage afforded for any one vehicle that the covered person is the named
             99      insured or an insured family member.
             100          (iii) This coverage shall be in addition to the coverage on the vehicle the covered person
             101      is occupying.
             102          (iv) Neither the primary nor the secondary coverage may be set off against the other.
             103          (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
             104      coverage, and the coverage elected by a person described under Subsections (1)(a) and (b) shall
             105      be secondary coverage.
             106          (7) (a) Uninsured motorist coverage under this section applies to bodily injury, sickness,
             107      disease, or death of covered persons while occupying or using a motor vehicle only if the motor
             108      vehicle is described in the policy under which a claim is made, or if the motor vehicle is a newly
             109      acquired or replacement vehicle covered under the terms of the policy. Except as provided in
             110      Subsection (6) or (7), a covered person injured in a vehicle described in a policy that includes
             111      uninsured motorist benefits may not elect to collect uninsured motorist coverage benefits from any
             112      other motor vehicle insurance policy under which he is a covered person.
             113          (b) Each of the following persons may also recover uninsured motorist benefits under any
             114      other policy in which they are described as a "covered person" as defined in Subsection (1):
             115          (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
             116          (ii) a covered person injured while occupying or using a motor vehicle that is not owned
             117      by, furnished, or available for the regular use of the covered person, the covered person's resident
             118      spouse, or the covered person's resident relative.
             119          (c) A covered person in Subsection (7)(b) is not barred against making subsequent
             120      elections if recovery is unavailable under previous elections.


             121          (8) (a) As used in this section, "underinsured motor vehicle" includes a vehicle, the
             122      operation, maintenance, or use of which is covered under a liability policy at the time of an
             123      injury-causing occurrence, but which has insufficient liability coverage to compensate fully the
             124      injured party for all special and general damages.
             125          (b) The term "underinsured motor vehicle" does not include:
             126          (i) a motor vehicle that is covered under the liability coverage of the same policy that also
             127      contains the underinsured motorist coverage; or
             128          (ii) an uninsured motor vehicle as defined in Subsection (2).
             129          (9) (a) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c) provides
             130      coverage for covered persons who are legally entitled to recover damages from owners or operators
             131      of underinsured motor vehicles because of bodily injury, sickness, disease, or death [in limits of
             132      at least $10,000 for one person in any one accident, and at least $20,000 for two or more persons
             133      in any one accident].
             134          (b) For new policies written on or after January 1, 2001, the limits of underinsured
             135      motorist coverage are equal to the limits of the insured's motor vehicle liability policy unless the
             136      insured purchases coverage in a lesser amount by signing an acknowledgment form provided by
             137      the insurer that:
             138          (i) waives the higher coverage;
             139          (ii) reasonably explains the purpose of underinsured motorist coverage; and
             140          (iii) discloses the additional premiums required to purchase underinsured motorist
             141      coverage with limits equal to the limits of the insured's motor vehicle liability policy.
             142          (c) Underinsured motorist coverage may not be sold with limits that are less than $10,000
             143      for one person in any one accident and at least $20,000 for two or more persons in any one
             144      accident.
             145          (d) The acknowledgment under Subsection (9)(b) continues for that issuer of the
             146      underinsured motorist coverage until the insured, in writing, requests different underinsured
             147      motorist coverage from the insurer.
             148          [(b)] (e) The named insured's underinsured motorist coverage, as described in Subsection
             149      (9)(a), is secondary to the liability coverage of an owner or operator of an underinsured motor
             150      vehicle, as described in Subsection (8). Underinsured motorist coverage may not be set off against
             151      the liability coverage of the owner or operator of an underinsured motor vehicle, but shall be added


             152      to, combined with, or stacked upon the liability coverage of the owner or operator of the
             153      underinsured motor vehicle to determine the limit of coverage available to the injured person.
             154          [(c)] (f) (i) [For new policies or contracts written after January 1, 1993, a] A named insured
             155      may reject underinsured motorist coverage by an express writing to the insurer that provides
             156      liability coverage under Subsection 31A-22-302 (1)(a).
             157          (ii) This written rejection shall be on a form provided by the insurer that includes a
             158      reasonable explanation of the purpose of underinsured motorist coverage and when it would be
             159      applicable.
             160          (iii) This rejection continues for that issuer of the liability coverage until the insured in
             161      writing requests underinsured motorist coverage from that liability insurer.
             162          [(ii)] (g) In conjunction with the first three renewal notices sent after January 1, [1993]
             163      2000, for policies existing on that date, the insurer shall [notify] provide notice to the insured [of
             164      the availability] that reasonably explains the purpose of underinsured motorist coverage [along
             165      with estimated ranges of premiums for the coverage. The department shall provide standard
             166      language to be used by insurers to fulfill the insurers' duty under this Subsection (9).] and discloses
             167      the additional premiums required to purchase underinsured motorist coverage with limits equal to
             168      the limits of the insured's motor vehicle liability policy.
             169          (10) (a) Underinsured motorist coverage under this section applies to bodily injury,
             170      sickness, disease, or death of an insured while occupying or using a motor vehicle owned by,
             171      furnished, or available for the regular use of the insured, a resident spouse, or resident relative of
             172      the insured, only if the motor vehicle is described in the policy under which a claim is made, or
             173      if the motor vehicle is a newly acquired or replacement vehicle covered under the terms of the
             174      policy. Except as provided in this Subsection (10), a covered person injured in a vehicle described
             175      in a policy that includes underinsured motorist benefits may not elect to collect underinsured
             176      motorist coverage benefits from any other motor vehicle insurance policy under which he is a
             177      named insured.
             178          (b) (i) The limit of liability for underinsured motorist coverage for two or more motor
             179      vehicles may not be added together, combined, or stacked to determine the limit of insurance
             180      coverage available to an injured person for any one accident.
             181          (ii) Subsection (10)(b)(i) applies to all persons except a covered person as defined under
             182      Subsection (10)(c)(i)(B).


             183          (iii) Coverage on a motor vehicle occupied at the time of an accident shall be primary
             184      coverage, and the coverage elected by a person described under Subsections (1)(a) and (b) shall
             185      be secondary coverage.
             186          (c) Underinsured motorist coverage:
             187          (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers' Compensation
             188      Act;
             189          (ii) may not be subrograted by the Workers' Compensation insurance carrier;
             190          (iii) may not be reduced by any benefits provided by Workers' Compensation insurance;
             191      and
             192          (iv) may be reduced by health insurance subrogation only after the covered person has
             193      been made whole.
             194          [(c)] (d) (i) Each of the following persons may also recover underinsured motorist
             195      coverage benefits under any other policy in which they are described as a "covered person" as
             196      defined under Subsection (1):
             197          (A) a covered person injured as a pedestrian by an underinsured motor vehicle; or
             198          (B) a covered person injured while occupying or using a motor vehicle that is not owned
             199      by, furnished, or available for the regular use of the covered person, the covered person's resident
             200      spouse, or the covered person's resident relative.
             201          (ii) This coverage shall only be available as a secondary source of coverage.
             202          (iii) A covered person as defined under Subsection (10)[(c)] (b)(i)(B) is entitled to the
             203      highest limits of underinsured motorist coverage afforded for any one vehicle that the covered
             204      person is the named insured or an insured family member.
             205          (iv) This coverage shall be in addition to the coverage on the vehicle the covered person
             206      is occupying.
             207          (v) Neither the primary nor the secondary coverage may be set off against the other.
             208          [(d)] (e) A covered injured person is not barred against making subsequent elections if
             209      recovery is unavailable under previous elections.
             210          (11) A claim may not be brought by a covered person against a motor vehicle underinsured
             211      motorist policy more than three years after the date of the liability policy payment document.





Legislative Review Note
    as of 2-1-00 3:50 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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