The bill S.7, introduced by Senator Hashim, aims to amend Vermont's automobile insurance laws by enhancing protections for policyholders regarding underinsured motorist coverage and medical payments coverage. Specifically, the bill prohibits insurers from deducting any payments received by a policyholder from the at-fault driver's liability insurance from the underinsured motorist coverage available to them. Additionally, it modifies the definition of underinsured motorist coverage to clarify that a motor vehicle is considered underinsured if the liability insurance limits are less than the damages the insured is legally entitled to recover due to injury or death.

Furthermore, the bill limits insurers' subrogation rights concerning medical payments coverage, stating that insurers who have paid medical costs for the insured cannot claim subrogation rights against third parties for those medical expenses. The effective date of this act is set for January 1, 2026, applying to all automobile insurance policies offered, issued, or renewed after that date.

Statutes affected:
As Introduced: 23-941, 8-4203(4), 8-4203