The bill S.7 amends existing laws regarding automobile insurance in Vermont, specifically focusing on the definitions and coverage related to uninsured and underinsured motorists. It clarifies that a motor vehicle is considered underinsured if the liability insurance limits are less than the damages that an insured person is legally entitled to recover due to injury or death. Additionally, it establishes that payments made to an injured party under the liability insurance of the responsible party will not be deducted from the underinsured motorist coverage available to the injured party.

Furthermore, the bill modifies the subrogation rights of insurance companies, stating that insurers who have paid medical costs under medical payments coverage cannot claim subrogation against third parties. The act will take effect upon passage and will apply to all automobile insurance policies offered, issued, or renewed on or after January 1, 2026.

Statutes affected:
As Introduced: 23-941, 8-4203(4), 8-4203
As Passed By the Senate -- Official: 23-941, 8-4203(4), 8-4203
As Passed By the Senate -- Unofficial: 23-941, 8-4203(4), 8-4203