Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                           H.B. 274
Approved for Filing: A. Weenig 6
          6 01-12-24 1:35 PM 6
            UNDERINSURED MOTORIST COVERAGE AMENDMENTS
                                      2024 GENERAL SESSION
                                           STATE OF UTAH
                              Chief Sponsor: Anthony E. Loubet
                                 Senate Sponsor: ____________
 6
 LONG TITLE
 General Description:
        This bill modifies provisions related to underinsured and uninsured motorist coverage.
 Highlighted Provisions:
        This bill:
        < provides that a covered person occupying a motor vehicle furnished by the covered
 person's employer may recover underinsured and uninsured motorist benefits; and
        < makes technical and conforming changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:
        31A-22-305, as last amended by Laws of Utah 2023, Chapters 69, 185 and 327
        31A-22-305.3, as last amended by Laws of Utah 2023, Chapters 69, 327
23
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 31A-22-305 is amended to read:
                                                                                                     H.B. 274
        31A-22-305. Uninsured motorist coverage.
        (1) As used in this section, "covered persons" includes:
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       H.B. 274                                                                      01-12-24 1:35 PM
         (a) the named insured;
         (b) for a claim arising on or after May 13, 2014, the named insured's dependent minor
 children;
         (c) 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;
         (d) any person occupying or using a motor vehicle:
         (i) referred to in the policy; or
         (ii) owned by a self-insured; and
         (e) any person who is entitled to recover damages against the owner or operator of the
 uninsured or underinsured motor vehicle because of bodily injury to or death of persons under
 Subsection (1)(a), (b), (c), or (d).
         (2) As used in this section, "uninsured motor vehicle" includes:
         (a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
 under a liability policy at the time of an injury-causing occurrence; or
         (ii) (A) a motor vehicle covered with lower liability limits than required by Section
 31A-22-304; and
         (B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
 the deficiency;
         (b) an unidentified motor vehicle that left the scene of an accident proximately caused
 by the motor vehicle operator;
         (c) a motor vehicle covered by a liability policy, but coverage for an accident is
 disputed by the liability insurer for more than 60 days or continues to be disputed for more than
 60 days; or
         (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
 the motor vehicle is declared insolvent by a court of competent jurisdiction; and
         (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
 that the claim against the insolvent insurer is not paid by a guaranty association or fund.
         (3) (a) Uninsured motorist coverage under Subsection 31A-22-302(1)(b) provides
 coverage for covered persons who are legally entitled to recover damages from owners or
 operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
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       01-12-24 1:35 PM                                                                          H.B. 274
        (b) A covered person occupying or using a motor vehicle that is owned, furnished, or
 leased by the covered person's employer may recover uninsured benefits, notwithstanding any
 regular use exclusion described in the policy.
        (4) (a) For new policies written on or after January 1, 2001, the limits of uninsured
 motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
 under the named insured's motor vehicle policy, unless a named insured rejects or purchases
 coverage in a lesser amount by signing an acknowledgment form that:
        (i) is filed with the department;
        (ii) is provided by the insurer;
        (iii) waives the higher coverage;
        (iv) need only state in this or similar language that uninsured motorist coverage
 provides benefits or protection to you and other covered persons for bodily injury resulting
 from an accident caused by the fault of another party where the other party has no liability
 insurance; and
        (v) discloses the additional premiums required to purchase uninsured motorist
 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
 under the named insured's motor vehicle policy.
        (b) Any selection or rejection under this Subsection (4) continues for that issuer of the
 liability coverage until the insured requests, in writing, a change of uninsured motorist
 coverage from that liability insurer.
        (c) (i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after
 January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
 arbitration or filed a complaint in a court of competent jurisdiction.
        (ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b)
 clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
        (d) For purposes of this Subsection (4), "new policy" means:
        (i) any policy that is issued which does not include a renewal or reinstatement of an
 existing policy; or
        (ii) a change to an existing policy that results in:
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        H.B. 274                                                                    01-12-24 1:35 PM
         (A) a named insured being added to or deleted from the policy; or
         (B) a change in the limits of the named insured's motor vehicle liability coverage.
         (e) (i) As used in this Subsection (4)(e), "additional motor vehicle" means a change
 that increases the total number of vehicles insured by the policy, and does not include
 replacement, substitute, or temporary vehicles.
         (ii) The adding of an additional motor vehicle to an existing personal lines or
 commercial lines policy does not constitute a new policy for purposes of Subsection (4)(d).
         (iii) If an additional motor vehicle is added to a personal lines policy where uninsured
 motorist coverage has been rejected, or where uninsured motorist limits are lower than the
 named insured's motor vehicle liability limits, the insurer shall provide a notice to a named
 insured within 30 days that:
         (A) in the same manner as described in Subsection (4)(a)(iv), explains the purpose of
 uninsured motorist coverage; and
         (B) encourages the named insured to contact the insurance company or insurance
 producer for quotes as to the additional premiums required to purchase uninsured motorist
 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
 under the named insured's motor vehicle policy.
         (f) A change in policy number resulting from any policy change not identified under
 Subsection (4)(d)(ii) does not constitute a new policy.
         (g) (i) Subsection (4)(d) applies retroactively to any claim arising on or after January 1,
 2001, for which, as of May 1, 2012, an insured has not made a written demand for arbitration
 or filed a complaint in a court of competent jurisdiction.
         (ii) The Legislature finds that the retroactive application of Subsection (4):
         (A) does not enlarge, eliminate, or destroy vested rights; and
         (B) clarifies legislative intent.
         (h) A self-insured, including a governmental entity, may elect to provide uninsured
 motorist coverage in an amount that is less than its maximum self-insured retention under
 Subsections (4)(a) and (5)(a) by issuing a declaratory memorandum or policy statement from
 the chief financial officer or chief risk officer that declares the:
         (i) self-insured entity's coverage level; and
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        01-12-24 1:35 PM                                                                         H.B. 274
        (ii) process for filing an uninsured motorist claim.
        (i) Uninsured motorist coverage may not be sold with limits that are less than the
 minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304.
        (j) The acknowledgment under Subsection (4)(a) continues for that issuer of the
 uninsured motorist coverage until the named insured requests, in writing, different uninsured
 motorist coverage from the insurer.
        (k) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
 policies existing on that date, the insurer shall disclose in the same medium as the premium
 renewal notice, an explanation of:
        (A) the purpose of uninsured motorist coverage in the same manner as described in
 Subsection (4)(a)(iv); and
        (B) a disclosure of the additional premiums required to purchase uninsured motorist
 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
 under the named insured's motor vehicle policy.
        (ii) The disclosure required under Subsection (4)(k)(i) shall be sent to all named
 insureds that carry uninsured motorist coverage limits in an amount less than the named
 insured's motor vehicle liability policy limits or the maximum uninsured motorist coverage
 limits available by the insurer under the named insured's motor vehicle policy.
        (l) For purposes of this Subsection (4), a notice or disclosure sent to a named insured in
 a household constitutes notice or disclosure to all insureds within the household.
        (5) (a) (i) Except as provided in Subsection (5)(b), the named insured may reject
 uninsured motorist coverage by an express writing to the insurer that provides liability
 coverage under Subsection 31A-22-302(1)(a).
        (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
 explanation of the purpose of uninsured motorist coverage.
        (iii) This rejection continues for that issuer of the liability coverage until the insured in
 writing requests uninsured motorist coverage from that liability insurer.
        (b) (i) All persons, including governmental entities, that are engaged in the business of,
 or that accept payment for, transporting natural persons by motor vehicle, and all school
 districts that provide transportation services for their students, shall provide coverage for all
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       H.B. 274                                                                     01-12-24 1:35 PM
 motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
 uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
           (ii) This coverage is secondary to any other insurance covering an injured covered
 person.
           (c) Uninsured motorist coverage:
           (i) does not cover any benefit paid or payable under Title 34A, Chapter 2, Workers'
 Compensation Act, except that the covered person is credited an amount described in
 Subsection 34A-2-106(5);
           (ii) may not be subrogated by the workers' compensation insurance carrier, workers'
 compensation insurance, uninsured employer, the Uninsured Employers Fund created in
 Section 34A-2-704, or the Employers' Reinsurance Fund created in Section 34A-2-702;
           (iii) may not be reduced by any benefits provided by workers' compensation insurance,
 uninsured employer, the Uninsured Employers Fund created in Section 34A-2-704, or the
 Employers' Reinsurance Fund created in Section 34A-2-702;
           (iv) notwithstanding Subsection 31A-1-103(3)(f), may be reduced by health insurance
 subrogation only after the covered person has been made whole;
           (v) may not be collected for bodily injury or death sustained by a person:
           (A) while committing a violation of Section 41-1a-1314;
           (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
 in violation of Section 41-1a-1314; or
           (C) while committing a felony; and
           (vi) notwithstanding Subsection (5)(c)(v), may be recovered:
           (A) for a person under 18 years old who is injured within the scope of Subsection
 (5)(c)(v) but limited to medical and funeral expenses; or
           (B) by a law enforcement officer as defined in Section 53-13-103, who is injured
 within the course and scope of the law enforcement officer's duties.
           (d) As used in this Subsection (5), "motor vehicle" has the same meaning as under
 Section 41-1a-102.
           (6) When a covered person alleges that an uninsured motor vehicle under Subsection
 (2)(b) proximately caused an accident without touching the covered person or the motor
 vehicle occupied by the covered person, the covered person shall show the existence of the
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        01-12-24 1:35 PM                                                                        H.B. 274
 uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
 person's testimony.
        (7) (a) The limit of liability for uninsured motorist coverage for two or more motor
 vehicles may not be added together, combined, or stacked to determine the limit of insurance
 coverage available to an injured person for any one accident.
        (b) (i) Subsection (7)(a) applies to all persons except a covered person as defined under
 Subsection (8)(b).
        (ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest
 limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
 person is the named insured or an insured family member.
        (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
 person is occupying.
        (iv) Neither the primary nor the secondary coverage may be set off against the other.
        (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
 coverage, and the coverage elected by a person described under Subsections (1)(a) through (c)
 shall be secondary coverage.
        (8) (a) Uninsured motorist coverage under this section applies to bodily injury,
 sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
 the motor vehicle is described in the policy under which a claim is made, or if the motor
 vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
 Except as provided in Subsection (7) or this Subsection (8), a covered person injured in a
 motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
 collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
 under which the person is a covered person.
        (b) Each of the following persons may also recover uninsured motorist benefits under
 any one other policy in which they are described as a "covered person" as defined in Subsection
 (1):
        (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
        (ii) except as provided in Subsection (8)(c), a covered person injured while occupying
 or using a motor vehicle that is not owned, leased, or furnished:
        (A) to the covered person;
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        H.B. 274                                                                      01-12-24 1:35 PM
         (B) to the covered person's spouse; or
         (C) to the covered person's resident parent or resident sibling.
         (c) (i) A covered person may recover benefits from no more than two additional
 policies, one additional policy from each parent's household if the covered person is:
         (A) a dependent minor of parents who reside in separate households; and
         (B) injured while occupying or using a motor vehicle that is not owned, leased, or
 furnished:
         (I) to the covered person;
         (II) to the covered person's resident parent; or
         (III) to the covered person's resident sibling.
         (ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of
 the damages that the limit