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H.B. 423
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MOTOR VEHICLE LIABILITY COVERAGE
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Greg J. Curtis
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AN ACT RELATING TO MOTOR VEHICLES; AMENDING MOTOR VEHICLE LIABILITY
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COVERAGE EXCLUSION PROVISIONS.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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31A-22-303, as last amended by Chapter 192, Laws of Utah 1999
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
31A-22-303
is amended to read:
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31A-22-303. Motor vehicle liability coverage.
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(1) (a) In addition to complying with the requirements of Chapter 21 and Part II of Chapter
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22, a policy of motor vehicle liability coverage under Subsection
31A-22-302
(1)(a) shall:
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(i) name the motor vehicle owner or operator in whose name the policy was purchased,
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state that named insured's address, the coverage afforded, the premium charged, the policy period,
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and the limits of liability;
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(ii) (A) if it is an owner's policy, designate by appropriate reference all the motor vehicles
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on which coverage is granted, insure the person named in the policy, insure any other person using
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any named motor vehicle with the express or implied permission of the named insured, and, except
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as provided in Subsection (7), insure any person included in Subsection (1)(a)(iii) against loss from
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the liability imposed by law for damages arising out of the ownership, maintenance, or use of these
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motor vehicles within the United States and Canada, subject to limits exclusive of interest and
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costs, for each motor vehicle, in amounts not less than the minimum limits specified under Section
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31A-22-304
; or
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(B) if it is an operator's policy, insure the person named as insured against loss from the
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liability imposed upon him by law for damages arising out of the insured's use of any motor
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vehicle not owned by him, within the same territorial limits and with the same limits of liability
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as in an owner's policy under Subsection (1)(ii)(A);
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(iii) except as provided in Subsection (7), insure persons related to the named insured by
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blood, marriage, adoption, or guardianship who are residents of the named insured's household,
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including those who usually make their home in the same household but temporarily live
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elsewhere, to the same extent as the named insured and the available coverage of the policy may
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not be reduced to the persons described in this Subsection (1)(a)(iii) because:
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(A) a permissive user driving a covered motor vehicle is at fault in causing an accident;
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or
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(B) the named insured or any of the persons described in this Subsection (1)(a)(iii) driving
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a covered motor vehicle is at fault in causing an accident; and
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(iv) cover damages or injury resulting from a covered driver of a motor vehicle who is
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stricken by an unforeseeable paralysis, seizure, or other unconscious condition and who is not
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reasonably aware that paralysis, seizure, or other unconscious condition is about to occur to the
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extent that a person of ordinary prudence would not attempt to continue driving.
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(b) The driver's liability under Subsection (1)(a)(iv) is limited to the insurance coverage.
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(2) (a) A policy containing motor vehicle liability coverage under Subsection
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31A-22-302
(1)(a) may:
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(i) provide for the prorating of the insurance under that policy with other valid and
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collectible insurance;
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(ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;
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(iii) if the policy is issued to a person other than a motor vehicle business, limit the
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coverage afforded to a motor vehicle business or its officers, agents, or employees to the minimum
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limits under Section
31A-22-304
, and to those instances when there is no other valid and
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collectible insurance with at least those limits, whether the other insurance is primary, excess, or
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contingent; and
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(iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other than
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the motor vehicle business or its officers, agents, or employees to the minimum limits under
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Section
31A-22-304
, and to those instances when there is no other valid and collectible insurance
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with at least those limits, whether the other insurance is primary, excess, or contingent.
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(b) (i) The liability insurance coverage of a permissive user of a motor vehicle owned by
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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
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liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).
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(3) Motor vehicle liability coverage need not insure any liability:
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(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
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than a domestic employee, while engaged in the employment of the insured, or while engaged in
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the operation, maintenance, or repair of a designated vehicle; or
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(c) resulting from damage to property owned by, rented to, bailed to, or transported by the
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insured.
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(4) An insurance carrier providing motor vehicle liability coverage has the right to settle
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any claim covered by the policy, and if the settlement is made in good faith, the amount of the
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settlement is deductible from the limits of liability specified under Section
31A-22-304
.
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(5) A policy containing motor vehicle liability coverage imposes on the insurer the duty
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to defend, in good faith, any person insured under the policy against any claim or suit seeking
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damages which would be payable under the policy.
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(6) (a) If a policy containing motor vehicle liability coverage provides an insurer with the
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defense of lack of cooperation on the part of the insured, that defense is not effective against a third
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person making a claim against the insurer, unless there was collusion between the third person and
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the insured.
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(b) If the defense of lack of cooperation is not effective against the claimant, after
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payment, the insurer is subrogated to the injured person's claim against the insured to the extent
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of the payment and is entitled to reimbursement by the insured after the injured third person has
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been made whole with respect to the claim against the insured.
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(7) A policy of motor vehicle liability coverage under Subsection
31A-22-302
(1) may
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specifically exclude from coverage a person who is a resident of the named insured's household,
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including a person who usually makes his home in the same household but temporarily lives
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elsewhere, if:
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(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
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insured's proof of owner's or operator's security[.]; h [
and
] h
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(b) the named insured and the person excluded from coverage each provide written consent
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to the exclusion h [
.
]
; AND
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(c) THE INSURER INCLUDES THE NAME OF EACH PERSON EXCLUDED FROM COVERAGE IN
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THE EVIDENCE OF INSURANCE PROVIDED TO AN ADDITIONAL INSURED OR LOSS PAYEE.
h
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(8) A policy of motor vehicle liability coverage may limit coverage to the policy minimum
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limits under Section
31A-22-304
if the insured motor vehicle is operated by a person who has
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consumed any alcohol or any illegal drug or illegal substance if the policy or a specifically reduced
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premium was extended to the insured upon express written declaration executed by the insured that
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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.