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S.B. 52 Enrolled
AN ACT RELATING TO INSURANCE AND BOATING; REQUIRING OWNERS OF
PERSONAL WATERCRAFT TO MAINTAIN OWNER'S OR OPERATOR'S
SECURITY ON THEIR PERSONAL WATERCRAFT; SPECIFYING MEANS OF
COMPLYING WITH SECURITY REQUIREMENTS; PROVIDING FOR
ENFORCEMENT OF SECURITY REQUIREMENTS; PROVIDING CRIMINAL
PENALTIES; AND PROVIDING AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
31A-22-1501, Utah Code Annotated 1953
31A-22-1502, Utah Code Annotated 1953
31A-22-1503, Utah Code Annotated 1953
31A-22-1504, Utah Code Annotated 1953
73-18-13.5, Utah Code Annotated 1953
73-18-13.6, Utah Code Annotated 1953
73-18c-101, Utah Code Annotated 1953
73-18c-102, Utah Code Annotated 1953
73-18c-103, Utah Code Annotated 1953
73-18c-201, Utah Code Annotated 1953
73-18c-301, Utah Code Annotated 1953
73-18c-302, Utah Code Annotated 1953
73-18c-303, Utah Code Annotated 1953
73-18c-304, Utah Code Annotated 1953
73-18c-305, Utah Code Annotated 1953
73-18c-306, Utah Code Annotated 1953
73-18c-307, Utah Code Annotated 1953
73-18c-308, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-22-1501 is enacted to read:
31A-22-1501. Definitions.
As used in this part:
(1) "Operator" has the same meaning as under Section 73-18c-103.
(2) "Owner" has the same meaning as under Section 73-18c-103.
(3) "Personal watercraft" has the same meaning as under Section 73-18-2.
(4) "Personal watercraft business" means a personal watercraft sales agency, repair shop,
service station, storage garage, or public marina.
(5) "Rental company" means any person or organization in the business of providing
personal watercraft to the public.
(6) "Renter" means any person or organization obtaining the use of a personal watercraft
from a rental company under the terms of a rental agreement.
Section 2. Section 31A-22-1502 is enacted to read:
31A-22-1502. Personal watercraft liability coverage.
(1) A liability insurance policy purchased to satisfy the owner's or operator's security
requirement of Section 73-18c-301 shall:
(a) name the personal watercraft 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;
(b) (i) if it is an owner's policy:
(A) designate by appropriate reference each personal watercraft on which coverage is
granted;
(B) insure the person named in the policy;
(C) insure any other person using any named personal watercraft with the express or implied
permission of the named insured; and
(D) except as provided in Subsection (7), insure any person included in Subsection (1)(c)
against loss from the liability imposed by law for damages arising out of the ownership,
maintenance, or use of the named personal watercraft within the United States and Canada, subject
to limits exclusive of interest and costs, for each personal watercraft, in amounts not less than the
minimum limits specified under Section 31A-22-1503; or
(ii) if it is an operator's policy, insure the person named as insured against loss from the
liability imposed upon him or her by law for damages arising out of the insured's use of any personal
watercraft not owned by the insured, within the same territorial limits and with the same limits of
liability as in an owner's policy under Subsection (1)(b)(i); and
(c) 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.
(2) A liability insurance policy covering personal watercraft may:
(a) provide for the prorating of the insurance under that policy with other valid and
collectible insurance;
(b) grant any lawful coverage in addition to the required personal watercraft liability
coverage;
(c) if the policy is issued to a person other than a personal watercraft business, limit the
coverage afforded to a personal watercraft business or its officers, agents, or employees to the
minimum limits under Section 31A-22-1503, 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
(d) if issued to a personal watercraft business, restrict coverage afforded to anyone other than
the personal watercraft business or its officers, agents, or employees to the minimum limits under
Section 31A-22-1503, 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.
(3) Personal watercraft liability coverage need not insure any liability:
(a) under any workers' compensation law under Title 35 or 35A;
(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 personal watercraft; or
(c) resulting from damage to property owned by, rented to, bailed to, or transported by the
insured.
(4) An insurance carrier providing personal watercraft 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-22-1503.
(5) A policy containing personal watercraft 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 personal watercraft 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 personal watercraft liability coverage may specifically exclude from
coverage a person who is a resident of the named insured's household, including a person who
usually makes his or her home in the same household but temporarily lives elsewhere, if each person
excluded from coverage satisfies the owner's or operator's security requirement of Section
73-18c-101, independently of the named insured's proof of owner's or operator's security.
Section 3. Section 31A-22-1503 is enacted to read:
31A-22-1503. Personal watercraft liability policy minimum limits.
Policies containing personal watercraft liability coverage may not limit the insurer's liability
under that coverage below the following:
(1) (a) $25,000 because of liability for bodily injury to or death of one person, arising out
of the use of a personal watercraft in any one accident;
(b) subject to the limit for one person in Subsection (1)(a), in the amount of $50,000 because
of liability for bodily injury to or death of two or more persons arising out of the use of a personal
watercraft in any one accident; and
(c) in the amount of $15,000 because of liability for injury to, or destruction of, property of
others arising out of the use of a personal watercraft in any one accident; or
(2) $65,000 in any one accident whether arising from bodily injury to or the death of others,
or from destruction of, or damage to, the property of others.
Section 4. Section 31A-22-1504 is enacted to read:
31A-22-1504. Mandatory coverage.
A rental company shall provide its renters with primary coverage meeting the requirements
of Title 73, Chapter 18c, Financial Responsibility of Personal Watercraft Owners and Operators Act.
All coverage shall include primary defense costs and may not be waived.
Section 5. Section 73-18-13.5 is enacted to read:
73-18-13.5. Personal watercraft accidents -- Investigation and report of operator
security -- Agency action if no security -- Surrender of registration materials.
(1) Upon request of a peace officer investigating an accident involving a personal watercraft,
the operator of the personal watercraft shall provide evidence of the owner's or operator's security
required under Section 73-18c-301.
(2) The peace officer shall record on a form approved by the division:
(a) the information provided by the operator;
(b) whether the operator provided insufficient or no information; and
(c) whether the peace officer finds reasonable cause to believe that any information given
is not correct.
(3) The peace officer shall deposit all completed forms with the peace officer's agency,
which shall forward the forms to the division no later than ten days after receipt.
(4) (a) The division shall revoke the registration of a personal watercraft involved in an
accident unless the owner or operator can demonstrate to the division compliance with the owner's
or operator's security requirement of Section 73-18c-301 at the time of the accident.
(b) Any registration revoked may not be renewed for a period of one year following the date
of revocation.
(5) A person may appeal a revocation issued under Subsection (4) in accordance with
procedures established by the board by rule that are consistent with Title 63, Chapter 46b,
Administrative Procedures Act.
(6) (a) Any person whose registration is revoked under Subsection (4) shall return the
registration card and decals for the personal watercraft to the division.
(b) If the person fails to return the registration materials as required, they shall be confiscated
under Section 73-18-13.6.
(7) The board may make rules for the enforcement of this section.
(8) In this section, "evidence of owner's or operator's security" includes any one of the
following:
(a) the operator's:
(i) insurance policy;
(ii) binder notice;
(iii) renewal notice; or
(iv) card issued by an insurance company as evidence of insurance;
(b) a copy of a surety bond, certified by the surety, which conforms to Section 73-18c-103;
(c) a certificate of the state treasurer issued under Section 73-18c-305; or
(d) a certificate of self-funded coverage issued under Section 73-18c-306.
Section 6. Section 73-18-13.6 is enacted to read:
73-18-13.6. Grounds for confiscation of registration materials by state -- Additional fee
for reinstatement.
(1) (a) The division, any peace officer acting in an official capacity, or a person authorized
under Subsection (2) may take possession of any registration card or decal issued by the state:
(i) upon revocation of it;
(ii) that is fictitious;
(iii) that has been unlawfully or erroneously issued; or
(iv) that is unlawfully or erroneously displayed.
(b) A receipt shall be issued that describes each confiscated item.
(2) The division may enter into contractual agreements with constables or other law
enforcement agencies to facilitate confiscation of items listed in Subsection (1) if a person fails or
refuses to surrender any of those documents to the division upon demand.
(3) The division shall assess against a person making an application to renew a registration,
a fee, which shall be paid before the person's registration is renewed, to cover any costs of
confiscating that person's registration materials.
Section 7. Section 73-18c-101 is enacted to read:
73-18c-101. Title.
This chapter may be cited as the "Financial Responsibility of Personal Watercraft Owners
and Operators Act."
Section 8. Section 73-18c-103 is enacted to read:
73-18c-103. Definitions.
As used in this chapter:
(1) "Board" means the Board of Parks and Recreation.
(2) "Division" means the Division of Parks and Recreation.
(3) "Judgment" means any judgment that is final by:
(a) expiration without appeal of the time within which an appeal might have been perfected;
or
(b) final affirmation on appeal, rendered by a court of competent jurisdiction of any state or
of the United States, upon a cause of action for damages:
(i) arising out of the ownership, maintenance, or use of any personal watercraft, including
damages for care and loss of services because of bodily injury to or death of any person, or because
of injury to or destruction of property including the loss of use of the property; or
(ii) on a settlement agreement.
(4) "Nonresident" means any person who is not a resident of Utah.
(5) "Operator" means the person who is in control of a personal watercraft while it is in use.
(6) (a) "Owner" means a person, other than a lien holder, holding a proprietary interest in
or the title to a personal watercraft.
(b) "Owner" includes a person entitled to the use or possession of a personal watercraft
subject to an interest by another person, reserved or created by agreement and securing payment or
performance of an obligation.
(c) "Owner" does not include a lessee under a lease not intended as security.
(7) "Owner's or operator's security," "owner's security," or "operator's security" means any
of the following:
(a) an insurance policy or combination of policies conforming to Sections 31A-22-1502 and
31A-22-1503, which is issued by an insurer authorized to do business in Utah;
(b) a surety bond issued by an insurer authorized to do a surety business in Utah in which
the surety is subject to the minimum coverage limits and other requirements of policies conforming
to Sections 31A-22-1502 and 31A-22-1503, which names the division as a creditor under the bond
for the use of persons entitled to the proceeds of the bond;
(c) a deposit with the state treasurer of cash or securities complying with Section
73-18c-305;
(d) a certificate of self-funded coverage issued under Section 73-18c-306;
(e) a policy conforming to Sections 31A-22-1502 and 31A-22-1503 issued by the Risk
Management Fund created in Section 63A-4-201.
(8) "Personal watercraft" has the same meaning as provided in Section 73-18-2.
(9) "Registration" means the issuance of the registration cards and decals issued under the
laws of Utah pertaining to the registration of personal watercraft.
(10) "Registration materials" means the evidences of personal watercraft registration,
including all registration cards and decals.
(11) "Self-insurance" has the same meaning as provided in Section 31A-1-301.
(12) "Waters of the state" means any waters within the territorial limits of this state.
Section 9. Section 73-18c-104 is enacted to read:
73-18c-104. Liability not limited to face amount of owner's security.
(1) If a person maintains owner's security under this chapter, it does not limit the person's
liability to the face amount of the owner's security.
(2) Nothing in this chapter prevents the plaintiff in any action at law from relying for relief
upon other processes provided by law.
Section 10. Section 73-18c-201 is enacted to read:
73-18c-201. Division to administer and enforce chapter -- Board may adopt rules.
(1) The division shall administer and enforce the provisions of this chapter.
(2) The board may adopt rules as necessary for the administration of this chapter in
accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
Section 11. Section 73-18c-301 is enacted to read:
73-18c-301. Requirement of owner's or operator's security.
(1) Each resident owner of a personal watercraft shall maintain owner's or operator's security
in effect at any time that the personal watercraft is operated on waters of the state.
(2) Each nonresident owner of a personal watercraft that has been physically present in this
state for 90 or fewer days during the preceding 365 days shall maintain the type and amount of
owner's or operator's security required in his or her place of residence at any time the personal
watercraft is operated on waters of the state.
(3) Each nonresident owner of a personal watercraft that has been physically present in this
state more than 90 days during the preceding 365 days shall thereafter maintain owner's or operator's
security in effect at any time the personal watercraft is operated on waters of the state.
(4) The state and each of its political subdivisions and their respective departments,
institutions, or agencies shall maintain owner's or operator's security in effect at any time their
personal watercraft are operated on waters of the state.
(5) Any other state is considered a nonresident owner of its personal watercraft and is subject
to Subsection (2) or (3).
(6) The United States, any political subdivision of it, or any of its agencies may maintain
owner's or operator's security in effect for their personal watercraft.
Section 12. Section 73-18c-302 is enacted to read:
73-18c-302. Operating personal watercraft without owner's or operator's security --
Penalty.
(1) Any owner of a personal watercraft on which owner's or operator's security is required
under Section 73-18c-301, who operates the personal watercraft or permits it to be operated on
waters of the state without owner's security being in effect is guilty of a class B misdemeanor.
(2) Any other person who operates a personal watercraft upon waters of the state with the
knowledge that the owner does not have owner's security in effect for the personal watercraft is also
guilty of a class B misdemeanor, unless that person has in effect owner's or operator's security on
a Utah-registered personal watercraft or its equivalent that covers the operation, by him or her, of
the personal watercraft in question.
Section 13. Section 73-18c-303 is enacted to read:
73-18c-303. Condition to obtaining registration.
The owner of a personal watercraft required to maintain owner's security under Section
73-18c-301 shall be required to swear or affirm, in writing, that he or she has owner's security in
effect at the time of registering the personal watercraft.
Section 14. Section 73-18c-304 is enacted to read:
73-18c-304. Evidence of owner's or operator's security to be carried when operating
personal watercraft-- Defense -- Penalties.
(1) (a) (i) Except as provided in Subsection (1)(a)(ii), a person operating a personal
watercraft shall:
(A) have in the person's immediate possession evidence of owner's or operator's security for
the personal watercraft the person is operating; and
(B) display it upon demand of a peace officer.
(ii) A person operating a government-owned or government-leased personal watercraft is
exempt from the requirements of Subsection (1)(a)(i).
(b) Evidence of owner's or operator's security includes any one of the following:
(i) the operator's:
(A) insurance policy;
(B) binder notice;
(C) renewal notice; or
(D) card issued by an insurance company as evidence of insurance;
(ii) a copy of a surety bond, certified by the surety, which conforms to Section 73-18c-103;
(iii) a certificate of the state treasurer issued under Section 73-18c-305; or
(iv) a certificate of self-funded coverage issued under Section 73-18c-306.
(2) It is an affirmative defense to a charge under this section that the person had owner's or
operator's security in effect for the personal watercraft the person was operating at the time of the
person's citation or arrest.
(3) (a) A letter from an insurance agent or company verifying that the person had the
required liability insurance coverage on the date specified is considered proof of owner's or
operator's security for purposes of Subsection (2).
(b) The court considering a citation issued under this section shall allow the letter under
Subsection (3)(a) and a copy of the citation to be faxed or mailed to the clerk of the court to satisfy
Subsection (2).
(4) A violation of this section is a class B misdemeanor.
(5) If a person is convicted of a violation of this section and if the person is the owner of a
personal watercraft, the court shall:
(a) require the person to surrender the person's registration materials to the court; and
(b) forward the registration materials, together with a copy of the conviction, to the division.
(6) (a) Upon receiving notification from a court of a conviction for a violation of this section,
the division shall revoke the person's personal watercraft registration.
(b) Any registration revoked may not be renewed for a period of one year following the date
of revocation.
Section 15. Section 73-18c-305 is enacted to read:
73-18c-305. State treasurer's certificate to satisfy owner's or operator's security
requirement.
(1) A certificate of the state treasurer that conforms to this section satisfies the owner's or
operator's security requirement of Section 73-18c-301.
(2) The certificate of the state treasurer shall certify that the person named in it has deposited
in trust with the state treasurer cash in an amount equal to twice the single limit under Subsection
31A-22-1503(2) or securities with a fair market value of a similar amount, which securities are legal
investments for insurers under Section 31A-18-105. The state treasurer may not accept a deposit and
issue a certificate for it, unless the deposit is accompanied by evidence that there are no unsatisfied
liens of any character on the assets deposited.
(3) The deposit shall be held by the state treasurer in trust to satisfy any execution on a
judgment that would be paid under an insurance policy conforming to Sections 31A-22-1502 and
31A-22-1503 had the treasurer issued such a policy.
(4) Except as provided under Subsection (3), assets deposited with the treasurer under this
chapter are exempt from attachment or execution.
Section 16. Section 73-18c-306 is enacted to read:
73-18c-306. Certificate of self-funded coverage as proof of owner's or operator's
security.
(1) The division may, upon the application of any person, issue a certificate of self-funded
coverage when it is satisfied that the person has:
(a) more than 24 personal watercraft; and
(b) deposits, in a form approved by the division, securities in an amount of $200,000 plus
$100 for each personal watercraft up to and including 1,000 personal watercraft and $50 for each
personal watercraft over 1,000 personal watercraft.
(2) Persons holding a certificate of self-funded coverage under this chapter shall pay benefits
to persons injured from the self-funded person's operation, maintenance, and use of personal
watercraft as would an insurer issuing a policy to the self-funded person containing the coverages
under Sections 31A-22-1502 and 31A-22-1503.
(3) In accordance with Title 63, Chapter 46b, Administrative Procedures Act, the division
may, upon reasonable grounds, cancel the certificate. Failure to pay any judgment up to the limit
under Subsection 31A-22-1503(2) within 30 days after the judgment is final is a reasonable ground
to cancel the certificate.
(4) Any government entity with self-funded coverage for government-owned personal
watercraft under Title 63, Chapter 30, Utah Governmental Immunity Act, meets the requirements
of this section.
Section 17. Section 73-18c-307 is enacted to read:
73-18c-307. Claims adjustment by persons with owner's or operator's security other
than insurance.
(1) An owner or operator of a personal watercraft who maintains owner's or operator's
security by a means other than an insurance policy under Section 73-18c-103, shall refer all bodily
injury claims against the owner's or operator's security to an independent adjuster licensed under
Title 31A, Chapter 26, Insurance Adjusters, or to an attorney.
(2) Unless otherwise provided by contract, any personal watercraft claim adjustment expense
incurred by a person maintaining owner's or operator's security by a means other than an insurance
policy under Section 73-18c-103, shall be paid by the person who maintains this type of owner's or
operator's security.
(3) Owners and operators of personal watercraft maintaining owner's or operator's security
by a means other than an insurance policy under Section 73-18c-103 are subject to the claim
adjustment provisions of Title 31A, Chapter 26, Part III, Claims Practices, in connection with claims
against persons which arise out of the ownership, maintenance, or use of a personal watercraft.
Section 18. Section 73-18c-308 is enacted to read:
73-18c-308. Providing false evidence of owner's or operator's security -- Penalty.
(1) A person who provides evidence of owner's or operator's security to a peace officer under
Section 73-18-13.5 or 73-18c-304 knowing or having reason to believe that the evidence of owner's
or operator's security is false or that it is evidence of owner's or operator's security that is not in
effect is guilty of a class B misdemeanor.
(2) A person is guilty of a class A misdemeanor if the person:
(a) forges or, without authority, signs any evidence of proof of owner's or operator's security;
or
(b) falsely swears or affirms when obtaining a registration under Section 73-18c-303.
Section 19. Effective date.
This act takes effect on January 1, 1998.
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