Senate Bill No. 425
(By Senator Helmick)
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[Introduced March 24, 1997; referred to
the Committee on Banking and Insurance.]
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A BILL to amend and reenact section thirty-one, article six,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
motor vehicle policies; and eliminating the requirement that
all such policies must provide mandatory uninsured
motorists' coverage, and instead providing that such
policies provide the insured an option to purchase uninsured
motorists' coverage.
Be it enacted by the Legislature of West Virginia:
That section thirty-one, article six, chapter thirty-three
of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be amended and reenacted to read as follows:
Article 6. THE INSURANCE POLICY.
§33-6-31. Motor vehicle policy; omnibus clause; uninsured and
underinsured motorists' coverage; conditions for recovery under endorsement; rights and liabilities
of insurer.
(a) No policy or contract of bodily injury liability
insurance, or of property damage liability insurance, covering
liability arising from the ownership, maintenance or use of any
motor vehicle, shall be issued or delivered in this state to the
owner of such the vehicle, or shall be issued or delivered by any
insurer licensed in this state upon any motor vehicle for which
a certificate of title has been issued by the division of motor
vehicles of this state, unless it shall contain a provision
insuring the named insured and any other person, except a bailee
for hire and any persons specifically excluded by any restrictive
endorsement attached to the policy, responsible for the use of or
using the motor vehicle with the consent, expressed or implied,
of the named insured or his or her spouse against liability for
death or bodily injury sustained or loss or damage occasioned
within the coverage of the policy or contract as a result of
negligence in the operation or use of such the vehicle by the
named insured or by such person: Provided, That in any such
automobile liability insurance policy or contract, or endorsement
thereto, if coverage resulting from the use of a nonowned
automobile is conditioned upon the consent of the owner of such the motor vehicle, the word "owner" shall be construed to include
the custodian of such the nonowned motor vehicles.
Notwithstanding any other provision of this code, if the owner of
a policy receives a notice of cancellation pursuant to article
six-a of this chapter and the reason for the cancellation is a
violation of law by a person insured under the policy, said the
owner may by restrictive endorsement specifically exclude the
person who violated the law and the restrictive endorsement shall
be effective in regard to the total liability coverage provided
under the policy, including coverage provided pursuant to the
mandatory liability requirements of section two, article four,
chapter seventeen-d of this code, but nothing in such the
restrictive endorsement shall be construed to abrogate the
"family purpose doctrine".
(b) Nor shall any such policy or contract be so issued or
delivered unless it shall contain an endorsement or provisions
undertaking to Such policy shall provide an option to the insured
with appropriately adjusted premiums to pay the insured all sums
which he or she shall be legally entitled to recover as damages
from the owner or operator of an uninsured motor vehicle, within
limits which shall be no less than the requirements of section
two, article four, chapter seventeen-d of this code, as amended
from time to time: Provided, That such the policy or contract
shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he shall be
legally entitled to recover as damages from the owner or operator
of an uninsured motor vehicle up to an amount of one hundred
thousand dollars because of bodily injury to or death of one
person in any one accident and, subject to said the limit for one
person, in the amount of three hundred thousand dollars because
of bodily injury to or death of two or more persons in any one
accident and in the amount of fifty thousand dollars because of
injury to or destruction of property of others in any one
accident: Provided, however, That such the endorsement or
provisions may exclude the first three hundred dollars of
property damage resulting from the negligence of an uninsured
motorist: Provided further, That such the policy or contract
shall provide an option to the insured with appropriately
adjusted premiums to pay the insured all sums which he or she
shall legally be entitled to recover as damages from the owner or
operator of an uninsured or underinsured motor vehicle up to an
amount not less than limits of bodily injury liability insurance
and property damage liability insurance purchased by the insured
without setoff against the insured's policy or any other policy.
Regardless of whether motor vehicle coverage is offered and
provided to an insured through a multiple vehicle insurance
policy or contract, or in separate single vehicle insurance
policies or contracts, no insurer or insurance company providing a bargained for discount for multiple motor vehicles with respect
to underinsured motor vehicle coverage shall be treated
differently from any other insurer or insurance company utilizing
a single insurance policy or contract for multiple covered
vehicles for purposes of determining the total amount of coverage
available to an insured. "Underinsured motor vehicle" means a
motor vehicle with respect to the ownership, operation, or use of
which there is liability insurance applicable at the time of the
accident, but the limits of that insurance are either: (i) Less
than limits the insured carried for underinsured motorists'
coverage; or (ii) has been reduced by payments to others injured
in the accident to limits less than limits the insured carried
for underinsured motorists' coverage. No sums payable as a
result of underinsured motorists' coverage shall be reduced by
payments made under the insured's policy or any other policy.
(c) As used in this section, the term "bodily injury" shall
include death resulting therefrom and the term "named insured"
shall mean means the person named as such in the declarations of
the policy or contract and shall also include such the person's
spouse if a resident of the same household and the term "insured"
shall mean means the named insured and, while resident of the
same household, the spouse of any such named insured and
relatives of either, while in a motor vehicle or otherwise, and
any person, except a bailee for hire, who uses, with the consent, expressed or implied, of the named insured, the motor vehicle to
which the policy applies or the personal representative of any of
the above; and the term "uninsured motor vehicle" shall mean
means a motor vehicle as to which there is no: (i) Bodily injury
liability insurance and property damage liability insurance both
in the amounts specified by section two, article four, chapter
seventeen-d of this code, as amended from time to time; or (ii)
there is such insurance, but the insurance company writing the
same denies coverage thereunder; or (iii) there is no certificate
of self-insurance issued in accordance with the provisions of
said section. A motor vehicle shall be deemed is to be uninsured
if the owner or operator thereof be unknown: Provided, That
recovery under the endorsement or provisions shall be subject to
the conditions hereinafter set forth.
(d) Any insured intending to rely on the coverage required
by subsection (b) of this section shall, if any action be
instituted against the owner or operator of an uninsured or
underinsured motor vehicle, cause a copy of the summons and a
copy of the complaint to be served upon the insurance company
issuing the policy, in the manner prescribed by law, as though
such insurance company were a named party defendant; such the
company shall thereafter have the right to file pleadings and to
take other action allowable by law in the name of the owner, or
operator, or both, of the uninsured or underinsured motor vehicle or in its own name.
Nothing in this subsection shall prevent such the owner or
operator from employing counsel of his or her own choice and
taking any action in his or her own interest in connection with
such the proceeding.
(e) If the owner or operator of any motor vehicle which
causes bodily injury or property damage to the insured be
unknown, the insured, or someone in his or her behalf, in order
for the insured to recover under the uninsured motorist
endorsement or provision, shall:
(i) Within twenty-four hours after the insured discover, and
being physically able to report the occurrence of such the
accident, the insured, or someone in his or her behalf, shall
report the accident to a police, peace or judicial officer, or to
the commissioner of motor vehicles, unless the accident shall
already have been investigated by a police officer;
(ii) Notify the insurance company, within sixty days after
such the accident, that the insured or his or her legal
representative has a cause or causes of action arising out of
such the accident for damages against a person or persons whose
identity is unknown and setting forth the facts in support
thereof; and, upon written request of the insurance company
communicated to the insured not later than five days after
receipt of such the statement, shall make available for inspection the motor vehicle which the insured was occupying at
the time of the accident; and
(iii) Upon trial establish that the motor vehicle, which
caused the bodily injury or property damage, whose operator is
unknown, was a "hit and run" motor vehicle, meaning a motor
vehicle which causes damage to the property of the insured
arising out of physical contact of such the motor vehicle
therewith, or which causes bodily injury to the insured arising
out of physical contact of such the motor vehicle with the
insured or with a motor vehicle which the insured was occupying
at the time of the accident. If the owner or operator of any
motor vehicle causing bodily injury or property damage be
unknown, an action may be instituted against the unknown
defendant as "John Doe", in the county in which the accident took
place or in any other county in which such the action would be
proper under the provisions of article one, chapter fifty-six of
this code; service of process may be made by delivery of a copy
of the complaint and summons or other pleadings to the clerk of
the court in which the action is brought, and service upon the
insurance company issuing the policy shall be made as prescribed
by law as though such the insurance company were a party
defendant. The insurance company shall have the right to file
pleadings and take other action allowable by law in the name of
"John Doe".
(f) An insurer paying a claim under the endorsement or
provisions required by subsection (b) of this section shall be
subrogated to the rights of the insured to whom such the claim
was paid against the person causing such injury, death or damage
to the extent that payment was made. The bringing of an action
against the unknown owner or operator as "John Doe" or the
conclusion of such an action shall may not constitute a bar to
the insured, if the identity of the owner or operator who caused
the injury or damages complained of, becomes known, from bringing
an action against the owner or operator theretofore proceeded
against as "John Doe". Any recovery against such the owner or
operator shall be paid to the insurance company to the extent
that such the insurance company shall have paid the insured in
the action brought against such the owner or operator as "John
Doe", except that such insurance company shall pay its
proportionate part of any reasonable costs and expenses incurred
in connection therewith, including reasonable attorney's fees.
Nothing in an endorsement or provision made under this
subsection, nor any other provision of law, shall operate to
prevent the joining, in an action against "John Doe", of the
owner or operator of the motor vehicle causing injury as a party
defendant, and such the joinder is hereby specifically
authorized.
(g) No such endorsement or provisions shall contain any provision requiring arbitration of any claim arising under any
such endorsement or provision, nor may anything be required of
the insured except the establishment of legal liability, nor
shall the insured be restricted or prevented in any manner from
employing legal counsel or instituting legal proceedings.
(h) The provisions of subsections (a) and (b) of this
section shall may not apply to any policy of insurance to the
extent that it covers the liability of an employer to his or her
employees under any workers' compensation law.
(i) The commissioner of insurance shall formulate and
require the use of standard policy provisions for the insurance
required by this section, but use of such the standard policy
provisions may be waived by the commissioner in the circumstances
set forth in section ten of this article.
(j) A motor vehicle shall be deemed is to be uninsured
within the meaning of this section, if there has been a valid
bodily injury or property damage liability policy issued upon
such the vehicle, but which policy is uncollectible, in whole or
in part, by reason of the insurance company issuing such a policy
upon such the vehicle being insolvent or having been placed in
receivership. The right of subrogation granted insurers under
the provisions of subsection (f) of this section shall may not
apply as against any person or persons who is or becomes an
uninsured motorist for the reasons set forth in this subsection.
(k) Nothing contained herein shall prevent any insurer from
also offering benefits and limits other than those prescribed
herein, nor shall this section be construed as preventing any
insurer from incorporating in such the terms, conditions and
exclusions as may be consistent with the premium charged.
(l) The insurance commissioner shall review on an annual
basis the rate structure for uninsured and underinsured
motorists' coverage as set forth in subsection (b) of this
section and shall report to the Legislature on said the rate
structure on or before the fifteenth day of January, one thousand
nine hundred eighty-three, and on or before the fifteenth day of
January of each of the next two succeeding years.
NOTE: The purpose of this bill is to eliminate the
requirement of mandatory uninsured motorists' coverage in
automobile insurance policies, and to instead provide to the
insured an option to purchase such uninsured motorists' coverage.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.