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H.B. 423

             1     

MOTOR VEHICLE LIABILITY COVERAGE

             2     
2000 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Greg J. Curtis

             5      AN ACT RELATING TO MOTOR VEHICLES; AMENDING MOTOR VEHICLE LIABILITY
             6      COVERAGE EXCLUSION PROVISIONS.
             7      This act affects sections of Utah Code Annotated 1953 as follows:
             8      AMENDS:
             9          31A-22-303, as last amended by Chapter 192, Laws of Utah 1999
             10      Be it enacted by the Legislature of the state of Utah:
             11          Section 1. Section 31A-22-303 is amended to read:
             12           31A-22-303. Motor vehicle liability coverage.
             13          (1) (a) In addition to complying with the requirements of Chapter 21 and Part II of Chapter
             14      22, a policy of motor vehicle liability coverage under Subsection 31A-22-302 (1)(a) shall:
             15          (i) name the motor vehicle owner or operator in whose name the policy was purchased,
             16      state that named insured's address, the coverage afforded, the premium charged, the policy period,
             17      and the limits of liability;
             18          (ii) (A) if it is an owner's policy, designate by appropriate reference all the motor vehicles
             19      on which coverage is granted, insure the person named in the policy, insure any other person using
             20      any named motor vehicle with the express or implied permission of the named insured, and, except
             21      as provided in Subsection (7), insure any person included in Subsection (1)(a)(iii) against loss from
             22      the liability imposed by law for damages arising out of the ownership, maintenance, or use of these
             23      motor vehicles within the United States and Canada, subject to limits exclusive of interest and
             24      costs, for each motor vehicle, in amounts not less than the minimum limits specified under Section
             25      31A-22-304 ; or
             26          (B) if it is an operator's policy, insure the person named as insured against loss from the
             27      liability imposed upon him by law for damages arising out of the insured's use of any motor


             28      vehicle not owned by him, within the same territorial limits and with the same limits of liability
             29      as in an owner's policy under Subsection (1)(ii)(A);
             30          (iii) except as provided in Subsection (7), insure persons related to the named insured by
             31      blood, marriage, adoption, or guardianship who are residents of the named insured's household,
             32      including those who usually make their home in the same household but temporarily live
             33      elsewhere, to the same extent as the named insured and the available coverage of the policy may
             34      not be reduced to the persons described in this Subsection (1)(a)(iii) because:
             35          (A) a permissive user driving a covered motor vehicle is at fault in causing an accident;
             36      or
             37          (B) the named insured or any of the persons described in this Subsection (1)(a)(iii) driving
             38      a covered motor vehicle is at fault in causing an accident; and
             39          (iv) cover damages or injury resulting from a covered driver of a motor vehicle who is
             40      stricken by an unforeseeable paralysis, seizure, or other unconscious condition and who is not
             41      reasonably aware that paralysis, seizure, or other unconscious condition is about to occur to the
             42      extent that a person of ordinary prudence would not attempt to continue driving.
             43          (b) The driver's liability under Subsection (1)(a)(iv) is limited to the insurance coverage.
             44          (2) (a) A policy containing motor vehicle liability coverage under Subsection
             45      31A-22-302 (1)(a) may:
             46          (i) provide for the prorating of the insurance under that policy with other valid and
             47      collectible insurance;
             48          (ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;
             49          (iii) if the policy is issued to a person other than a motor vehicle business, limit the
             50      coverage afforded to a motor vehicle business or its officers, agents, or employees to the minimum
             51      limits under Section 31A-22-304 , and to those instances when there is no other valid and
             52      collectible insurance with at least those limits, whether the other insurance is primary, excess, or
             53      contingent; and
             54          (iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other than
             55      the motor vehicle business or its officers, agents, or employees to the minimum limits under
             56      Section 31A-22-304 , and to those instances when there is no other valid and collectible insurance
             57      with at least those limits, whether the other insurance is primary, excess, or contingent.
             58          (b) (i) The liability insurance coverage of a permissive user of a motor vehicle owned by


             59      a motor vehicle business shall be primary coverage.
             60          (ii) The liability insurance coverage of a motor vehicle business shall be secondary to the
             61      liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).
             62          (3) Motor vehicle liability coverage need not insure any liability:
             63          (a) under any workers' compensation law under Title 34A;
             64          (b) resulting from bodily injury to or death of an employee of the named insured, other
             65      than a domestic employee, while engaged in the employment of the insured, or while engaged in
             66      the operation, maintenance, or repair of a designated vehicle; or
             67          (c) resulting from damage to property owned by, rented to, bailed to, or transported by the
             68      insured.
             69          (4) An insurance carrier providing motor vehicle liability coverage has the right to settle
             70      any claim covered by the policy, and if the settlement is made in good faith, the amount of the
             71      settlement is deductible from the limits of liability specified under Section 31A-22-304 .
             72          (5) A policy containing motor vehicle liability coverage imposes on the insurer the duty
             73      to defend, in good faith, any person insured under the policy against any claim or suit seeking
             74      damages which would be payable under the policy.
             75          (6) (a) If a policy containing motor vehicle liability coverage provides an insurer with the
             76      defense of lack of cooperation on the part of the insured, that defense is not effective against a third
             77      person making a claim against the insurer, unless there was collusion between the third person and
             78      the insured.
             79          (b) If the defense of lack of cooperation is not effective against the claimant, after
             80      payment, the insurer is subrogated to the injured person's claim against the insured to the extent
             81      of the payment and is entitled to reimbursement by the insured after the injured third person has
             82      been made whole with respect to the claim against the insured.
             83          (7) A policy of motor vehicle liability coverage under Subsection 31A-22-302 (1) may
             84      specifically exclude from coverage a person who is a resident of the named insured's household,
             85      including a person who usually makes his home in the same household but temporarily lives
             86      elsewhere, if:
             87          (a) at the time of the proposed exclusion, each person excluded from coverage satisfies the
             88      owner's or operator's security requirement of Section 41-12a-301 , independently of the named
             89      insured's proof of owner's or operator's security[.]; h [ and ] h


             90          (b) the named insured and the person excluded from coverage each provide written consent
             91      to the exclusion h [ . ] ; AND
             91a           (c) THE INSURER INCLUDES THE NAME OF EACH PERSON EXCLUDED FROM COVERAGE IN
             91b      THE EVIDENCE OF INSURANCE PROVIDED TO AN ADDITIONAL INSURED OR LOSS PAYEE. h
             92          (8) A policy of motor vehicle liability coverage may limit coverage to the policy minimum
             93      limits under Section 31A-22-304 if the insured motor vehicle is operated by a person who has
             94      consumed any alcohol or any illegal drug or illegal substance if the policy or a specifically reduced
             95      premium was extended to the insured upon express written declaration executed by the insured that
             96      the insured motor vehicle would not be so operated.




Legislative Review Note
    as of 2-2-00 5:35 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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