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S.B. 186
This document includes Senate Committee Amendments incorporated into the bill on Tue,
Feb 25, 2003 at 3:37 PM by rday. -->
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UNINSURED AND UNDERINSURED MOTORIST
2
COVERAGE
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2003 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Dan R. Eastman
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This act modifies the Motor Vehicles Code by amending uninsured and underinsured
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motorists provisions. This act provides that a person who exercises unauthorized control
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over a vehicle, a passenger who has knowledge that the driver is exercising unauthorized
9
control, or a person who is committing a felony may not collect uninsured or
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underinsured motorist coverage. This act provides that a dependent minor of parents
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who reside in separate households may recover uninsured or underinsured benefits from
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each parent's policy and each parent's policy is liable only for the percentage of damage
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that the limit bears to the total of all uninsured coverage applicable to the accident. This
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act provides that an underinsured motor vehicle does not include a named insured's own
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vehicle. This act makes technical changes.
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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-22-302, as last amended by Chapter 1, Laws of Utah 2000
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31A-22-305, as last amended by Chapter 59, Laws of Utah 2001
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
31A-22-302
is amended to read:
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31A-22-302. Required components of motor vehicle insurance policies --
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Exceptions.
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(1) Every policy of insurance or combination of policies purchased to satisfy the
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owner's or operator's security requirement of Section
41-12a-301
shall include:
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(a) motor vehicle liability coverage under Sections
31A-22-303
and
31A-22-304
;
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(b) uninsured motorist coverage under Section
31A-22-305
, unless affirmatively
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waived under Subsection
31A-22-305
(4); and
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(c) underinsured motorist coverage under Section
31A-22-305
, unless affirmatively
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waived under Subsection
31A-22-305
(9)[(c)].
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(2) Every policy of insurance or combination of policies, purchased to satisfy the
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owner's or operator's security requirement of Section
41-12a-301
, except for motorcycles,
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trailers, and semitrailers, shall also include personal injury protection under Sections
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31A-22-306
through
31A-22-309
.
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(3) (a) First party medical coverages may be offered or included in policies issued to
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motorcycle, trailer, and semitrailer owners or operators.
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(b) Owners and operators of motorcycles, trailers, and semitrailers are not covered by
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personal injury protection coverages in connection with injuries incurred while operating any
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of these vehicles.
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Section 2.
Section
31A-22-305
is amended to read:
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31A-22-305. Uninsured and underinsured motorist coverage.
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(1) As used in this section, "covered persons" includes:
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(a) the named insured;
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(b) persons related to the named insured by blood, marriage, adoption, or guardianship,
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who are residents of the named insured's household, including those who usually make their
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home in the same household but temporarily live elsewhere;
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(c) any person occupying or using a motor vehicle:
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(i) referred to in the policy; or
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(ii) owned by a self-insurer; and
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(d) any person who is entitled to recover damages against the owner or operator of the
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uninsured or underinsured motor vehicle because of bodily injury to or death of persons under
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Subsection (1)(a), (b), or (c).
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(2) As used in this section, "uninsured motor vehicle" includes:
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(a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
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under a liability policy at the time of an injury-causing occurrence; or
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(ii) (A) a motor vehicle covered with lower liability limits than required by Section
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31A-22-304
; and
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(B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
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the deficiency;
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(b) an unidentified motor vehicle that left the scene of an accident proximately caused
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by the motor vehicle operator;
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(c) a motor vehicle covered by a liability policy, but coverage for an accident is
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disputed by the liability insurer for more than 60 days or[, beginning with the effective date of
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this act,] continues to be disputed for more than 60 days; or
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(d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
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the motor vehicle is declared insolvent by a court of competent jurisdiction;
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(ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
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that the claim against the insolvent insurer is not paid by a guaranty association or fund.
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(3) (a) Uninsured motorist coverage under Subsection
31A-22-302
(1)(b) provides
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coverage for covered persons who are legally entitled to recover damages from owners or
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operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
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(b) For new policies written on or after January 1, 2001, the limits of uninsured
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motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle
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liability coverage or the maximum uninsured motorist coverage limits available by the insurer
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under the insured's motor vehicle policy, unless the insured purchases coverage in a lesser
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amount by signing an acknowledgment form provided by the insurer that:
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(i) waives the higher coverage;
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(ii) reasonably explains the purpose of uninsured motorist coverage; and
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(iii) discloses the additional premiums required to purchase uninsured motorist
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coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
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coverage or the maximum uninsured motorist coverage limits available by the insurer under the
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insured's motor vehicle policy.
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(c) Uninsured motorist coverage may not be sold with limits that are less than the
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minimum bodily injury limits for motor vehicle liability policies under Section
31A-22-304
.
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(d) The acknowledgment under Subsection (3)(b) continues for that issuer of the
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uninsured motorist coverage until the insured, in writing, requests different uninsured motorist
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coverage from the insurer.
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(e) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
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policies existing on that date, the insurer shall disclose in the same medium as the premium
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renewal notice, an explanation of the purpose of uninsured motorist coverage and the costs
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associated with increasing the coverage in amounts up to and including the maximum amount
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available by the insurer under the insured's motor vehicle policy.
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(ii) The disclosure shall be sent to all insureds that carry uninsured motorist coverage
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limits in an amount less than the insured's motor vehicle liability policy limits or the maximum
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uninsured motorist coverage limits available by the insurer under the insured's motor vehicle
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policy.
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(4) (a) (i) Except as provided in Subsection (4)(b), the named insured may reject
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uninsured motorist coverage by an express writing to the insurer that provides liability
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coverage under Subsection
31A-22-302
(1)(a).
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(ii) This rejection shall be on a form provided by the insurer that includes a reasonable
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explanation of the purpose of uninsured motorist coverage.
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(iii) This rejection continues for that issuer of the liability coverage until the insured in
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writing requests uninsured motorist coverage from that liability insurer.
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(b) (i) All persons, including governmental entities, that are engaged in the business of,
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or that accept payment for, transporting natural persons by motor vehicle, and all school
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districts that provide transportation services for their students, shall provide coverage for all
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motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
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uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
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(ii) This coverage is secondary to any other insurance covering an injured covered
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person.
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(c) Uninsured motorist coverage:
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(i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
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Compensation Act;
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(ii) may not be subrogated by the Workers' Compensation insurance carrier;
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(iii) may not be reduced by any benefits provided by Workers' Compensation
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insurance; [and]
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(iv) may be reduced by health insurance subrogation only after the covered person has
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been made whole[.]; and
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(v) may not be collected for bodily injury or death sustained by a person:
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(A) while committing a violation of Section
41-1a-1314
;
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(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
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in violation of Section
41-1a-1314
; or
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(C) while committing a felony.
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(d) As used in this Subsection (4):
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(i) "Governmental entity" has the same meaning as under Section
63-30-2
.
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(ii) "Motor vehicle" has the same meaning as under Section
41-1a-102
.
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(5) When a covered person alleges that an uninsured motor vehicle under Subsection
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(2)(b) proximately caused an accident without touching the covered person or the motor
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vehicle occupied by the covered person, the covered person must show the existence of the
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uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
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person's testimony.
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(6) (a) The limit of liability for uninsured motorist coverage for two or more motor
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vehicles may not be added together, combined, or stacked to determine the limit of insurance
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coverage available to an injured person for any one accident.
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(b) (i) Subsection (6)(a) applies to all persons except a covered person as defined under
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Subsection (7)(b)(ii).
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(ii) A covered person as defined under Subsection (7)(b)(ii) is entitled to the highest
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limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
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person is the named insured or an insured family member.
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(iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
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person is occupying.
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(iv) Neither the primary nor the secondary coverage may be set off against the other.
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(c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
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coverage, and the coverage elected by a person described under Subsections (1)(a) and (b) shall
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be secondary coverage.
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(7) (a) Uninsured motorist coverage under this section applies to bodily injury,
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sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
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the motor vehicle is described in the policy under which a claim is made, or if the motor
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vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
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Except as provided in Subsection (6) or this Subsection (7), a covered person injured in a
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motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
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collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
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under which he is a covered person.
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(b) Each of the following persons may also recover uninsured motorist benefits under
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any one other policy in which they are described as a "covered person" as defined in Subsection
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(1):
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(i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
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(ii) except as provided in Subsection (7)(c), a covered person injured while occupying
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or using a motor vehicle that is not owned [by], leased, or furnished, [or available for the
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regular use of] to the covered person, to the covered person's [resident] spouse, or to the
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covered person's S [
resident
]
DEPENDENT
s relative.
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(c) A covered person who is a dependent minor of parents who reside in separate
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households and who is injured while occupying or using a motor vehicle that is not owned,
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leased, or furnished to the covered person S
, THE COVERED PERSON'S PARENTS,
s or to the
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covered person's S [
resident relative
]
PARENT'S DEPENDENT
s may
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recover benefits from no more than two additional policies, one additional policy from each
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parent's household and each parent's policy is liable only for the percentage of the damages that
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the limit of liability of each parent's policy of uninsured motorist coverage bears to the total of
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all uninsured coverage applicable to the accident.
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(d) A covered person's recovery under any available policies may not exceed the full
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amount of damages.
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[(c)] (e) A covered person in Subsection (7)(b) is not barred against making subsequent
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elections if recovery is unavailable under previous elections.
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(8) (a) As used in this section, "underinsured motor vehicle" includes a motor vehicle,
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the operation, maintenance, or use of which is covered under a liability policy at the time of an
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injury-causing occurrence, but which has insufficient liability coverage to compensate fully the
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injured party for all special and general damages.
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(b) The term "underinsured motor vehicle" does not include:
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(i) a motor vehicle that is covered under the liability coverage of the same policy that
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also contains the underinsured motorist coverage; [or]
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(ii) an uninsured motor vehicle as defined in Subsection (2)[.]; or
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(iii) a motor vehicle owned or leased by the named insured, the named insured's
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spouse, or any dependant of the named insured.
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(9) (a) (i) Underinsured motorist coverage under Subsection
31A-22-302
(1)(c)
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provides coverage for covered persons who are legally entitled to recover damages from
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owners or operators of underinsured motor vehicles because of bodily injury, sickness, disease,
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or death.
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(ii) A covered person occupying or using a motor vehicle owned, leased, or furnished
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to the covered person, the covered person's spouse, or covered person's resident relative may
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recover underinsured benefits only if the motor vehicle is:
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(A) described in the policy under which a claim is made; or
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(B) a newly acquired or replacement motor vehicle covered under the terms of the
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policy.
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(b) For new policies written on or after January 1, 2001, the limits of underinsured
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motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle
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liability coverage or the maximum underinsured motorist coverage limits available by the
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insurer under the insured's motor vehicle policy, unless the insured purchases coverage in a
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lesser amount by signing an acknowledgment form provided by the insurer that:
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(i) waives the higher coverage;
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(ii) reasonably explains the purpose of underinsured motorist coverage; and
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(iii) discloses the additional premiums required to purchase underinsured motorist
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coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
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coverage or the maximum underinsured motorist coverage limits available by the insurer under
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the insured's motor vehicle policy.
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(c) Underinsured motorist coverage may not be sold with limits that are less than
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$10,000 for one person in any one accident and at least $20,000 for two or more persons in any
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one accident.
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(d) The acknowledgment under Subsection (9)(b) continues for that issuer of the
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underinsured motorist coverage until the insured, in writing, requests different underinsured
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motorist coverage from the insurer.
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(e) The named insured's underinsured motorist coverage, as described in Subsection
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(9)(a), is secondary to the liability coverage of an owner or operator of an underinsured motor
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vehicle, as described in Subsection (8). Underinsured motorist coverage may not be set off
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against the liability coverage of the owner or operator of an underinsured motor vehicle, but
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shall be added to, combined with, or stacked upon the liability coverage of the owner or
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operator of the underinsured motor vehicle to determine the limit of coverage available to the
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injured person.
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(f) (i) A named insured may reject underinsured motorist coverage by an express
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writing to the insurer that provides liability coverage under Subsection
31A-22-302
(1)(a).
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(ii) This written rejection shall be on a form provided by the insurer that includes a
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reasonable explanation of the purpose of underinsured motorist coverage and when it would be
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applicable.
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(iii) This rejection continues for that issuer of the liability coverage until the insured in
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writing requests underinsured motorist coverage from that liability insurer.
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(g) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
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policies existing on that date, the insurer shall disclose in the same medium as the premium
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renewal notice, an explanation of the purpose of underinsured motorist coverage and the costs
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associated with increasing the coverage in amounts up to and including the maximum amount
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available by the insurer under the insured's motor vehicle policy.
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(ii) The disclosure shall be sent to all insureds that carry underinsured motorist
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coverage limits in an amount less than the insured's motor vehicle liability policy limits or the
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maximum underinsured motorist coverage limits available by the insurer under the insured's
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motor vehicle policy.
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(10) (a) [Underinsured motorist coverage under this section applies to bodily injury,
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sickness, disease, or death of an insured while occupying or using a motor vehicle owned by,
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furnished, or available for the regular use of the insured, a resident spouse, or resident relative
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of the insured, only if the motor vehicle is described in the policy under which a claim is made,
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or if the motor vehicle is a newly acquired or replacement vehicle covered under the terms of
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the policy.] S
(i)
s Except as provided in this Subsection (10), a covered person injured in a motor
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vehicle described in a policy that includes underinsured motorist benefits may not elect to
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collect underinsured motorist coverage benefits from any other motor vehicle insurance policy
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[under which he is a named insured].
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[(b) (i) S ] [[]
(ii)
The limit of liability for underinsured motorist coverage for two or
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more motor
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vehicles may not be added together, combined, or stacked to determine the limit of insurance
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coverage available to an injured person for any one accident. [
]
] s
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[(ii) Subsection (10)(b)(i) applies to all persons except a covered person as defined
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under Subsection (10)(d)(i)(B).]
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S
(iii) SUBSECTION (10)(a)(ii) APPLIES TO ALL PERSONS EXCEPT A COVERED PERSON AS DEFINED
246b
UNDER SUBSECTIONS (10)(b)(i) AND (ii).
s
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(b) (i) Except as provided in Subsection (10)(b)(ii), a covered person injured while
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occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
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covered person, the covered person's spouse, or the covered person's resident dependent, may
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also recover benefits under any one other policy under which they are a covered person.
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(ii) A covered person who is a dependent minor of parents who reside in separate
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households S
AND WHO IS INJURED WHILE OCCUPYING OR USING A MOTOR VEHICLE THAT IS
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NOT OWNED, LEASED, OR FURNISHED TO THE COVERED PERSON, THE COVERED PERSON'S
252b
PARENTS, OR THE COVERED PERSON'S PARENT'S DEPENDENT
s may recover benefits from no
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more than two additional policies, one additional
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policy from each parent's household and each parent's policy is liable only for the percentage of
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the damages that the limit of liability of each parent's policy of underinsured motorist coverage
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bears to the total of all uninsured coverage applicable to the accident.
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(iii) A covered person's recovery under any available policies may not exceed the full
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amount of damages.
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[(iii) Coverage] (iv) Underinsured coverage on a motor vehicle occupied at the time of
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an accident shall be primary coverage, and the coverage elected by a person described under
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Subsections (1)(a) and (b) shall be secondary coverage.
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(v) The primary and the secondary coverage may not be set off against the other.
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(vi) A covered person as defined under Subsection (10)(b)(i) is entitled to the highest
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limits of underinsured motorist coverage under only one additional policy per household
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applicable to that covered person as a named insured, spouse, or relative.
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(vii) A covered injured person is not barred against making subsequent elections if
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recovery is unavailable under previous elections.
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(c) Underinsured motorist coverage:
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(i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
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Compensation Act;
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(ii) may not be [subrograted] subrogated by the Workers' Compensation insurance
271
carrier;
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(iii) may not be reduced by any benefits provided by Workers' Compensation
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insurance; [and]
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(iv) may be reduced by health insurance subrogation only after the covered person has
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been made whole[.]; and
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[(d) (i) Each of the following persons may also recover underinsured motorist coverage
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benefits under any other policy in which they are described as a "covered person" as defined
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under Subsection (1):]
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[(A) a covered person injured as a pedestrian by an underinsured motor vehicle; or]
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[(B) a covered person injured while occupying or using a motor vehicle that is not
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owned by, furnished, or available for the regular use of the covered person, the covered
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person's resident spouse, or the covered person's resident relative.]
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[(ii) This coverage shall only be available as a secondary source of coverage.]
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[(iii) A covered person as defined under Subsection (10)(d)(i)(B) is entitled to the
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highest limits of underinsured motorist coverage afforded for any one vehicle that the covered
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person is the named insured or an insured family member.]
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[(iv) This coverage shall be in addition to the coverage on the vehicle the covered
288
person is occupying.]
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[(v) Neither the primary nor the secondary coverage may be set off against the other.]
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[(e) A covered injured person is not barred against making subsequent elections if
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recovery is unavailable under previous elections.]
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[(11) A claim may not be brought by a covered person against a motor vehicle
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underinsured motorist policy more than three years after the date of the last liability policy
294
payment.]
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(v) may not be collected for bodily injury or death sustained by a person:
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(A) while committing a violation of Section
41-1a-1314
;
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(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
298
in violation of Section
41-1a-1314
; or
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(C) while committing a felony.
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(11) The inception of the loss under Subsection
31A-21-313
(1) for underinsured
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motorist claims occurs upon the date of the last liability policy payment.
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(12) (a) Within five business days after notification in a manner specified by the
303
department that all liability insurers have tendered their liability policy limits, the underinsured
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carrier shall either:
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(i) waive any subrogation claim the underinsured carrier may have against the person
306
liable for the injuries caused in the accident; or
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(ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
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(b) If neither option is exercised under Subsection (12)(a), the subrogation claim is
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deemed to be waived by the underinsured carrier.
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(13) Except as otherwise provided in this section, a covered person may seek, subject
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to the terms and conditions of the policy, additional coverage under any policy:
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(a) that provides coverage for damages resulting from motor vehicle accidents; and
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(b) that is not required to conform to Section
31A-22-302
.
Legislative Review Note
as of 2-14-03 3:28 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.