S.B. 60 Enrolled

MOTOR VEHICLE INSURANCE - LIABILITY
ON LOANED VEHICLE
1998 GENERAL SESSION
STATE OF UTAH
Sponsor: George Mantes
AN ACT RELATING TO INSURANCE; AMENDING CERTAIN MOTOR VEHICLE
INSURANCE PROVISIONS; AMENDING CERTAIN DEFINITIONS; AND PROVIDING
A COORDINATION CLAUSE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
31A-22-303, as last amended by Chapter 375, Laws of Utah 1997
31A-22-314, as enacted by Chapter 316, Laws of Utah 1994
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) 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:
(a) 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;
(b) (i) 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)(c) 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
(ii) 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)(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) A policy containing motor vehicle liability coverage under Subsection
31A-22-302 (1)(a) may:
[(a)] (i) provide for the prorating of the insurance under that policy with other valid and
collectible insurance;
[(b)] (ii) grant any lawful coverage in addition to the required motor vehicle liability
coverage;
[(c)] (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
[(d)] (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.
(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;

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(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 each person excluded from coverage satisfies the 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.
Section 2. Section 31A-22-314 is amended to read:
31A-22-314. Mandatory coverage.
(1) A rental company shall provide its renters with [primary] coverage meeting the

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requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and
Operators Act. [All coverage shall include primary defense costs and may not be waived.]
(2) The coverage required under Subsection (1) shall be excess or secondary coverage to any
other valid and collectible insurance of the renter.
Section 3. Coordination clause.
If this bill and 4th Substitute S.B. 76, Insurance Law Changes, both pass, it is the intent of
the Legislature that the amendments to Section 31A-22-314 in the 4th Substitute S.B. 76, Insurance
Law Changes, supersede the amendments to Section 31A-22-314 in this bill.

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