SB2091

Report Title:

Motor Vehicle Insurance; Named Driver Exclusion

Description:

Establishes a new section in chapter 431:10C to authorize exclusion of designated persons from coverage under a motor vehicle insurance policy, upon acknowledgment of the insured.

THE SENATE	S.B. NO.	2091
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

A BILL FOR AN ACT

 

RELATING TO MOTOR VEHICLE INSURANCE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that broad motor vehicle insurance coverage is generally consistent with public policy. The Hawaii Supreme Court has construed Hawaii law to the effect that a relative of a named insured, even if temporarily absent and living elsewhere, is nevertheless a resident of the named insured's household and therefore is covered under the named insured's policy. See Mikelson v. United Services Automobile Ass'n, 107 Hawai`i 192, 111 P.3d 601 (2005). This broad state policy may from time to time result in severe hardship to certain consumers. An insured with a good driving record, with whom a relative resides having an extensive history of serious moving violations or costly insurance claims, may be unable to find affordable insurance coverage. Adoption of a named driver exclusion would enable insurers to provide coverage at reasonable rates to applicants with good driving records, and to offer coverage to drivers with extensive negative history at premiums more reflective of the risk.

The purpose of this Act is to establish a named driver exclusion in the Hawaii Motor Vehicle Insurance Act.

SECTION 2. Section 431:10C-103, Hawaii Revised Statutes, is amended by amending the definition of "insured" to read:

""Insured" means:

(1) The person identified by name as insured in a motor vehicle insurance policy complying with section 431:10C-301; and

(2) A person residing in the same household with a named insured, except a designated person excluded pursuant to section 431:10C-   , specifically:

(A) A spouse or reciprocal beneficiary or other relative of a named insured; and

(B) A minor in the custody of a named insured or of a relative residing in the same household with a named insured.

A person resides in the same household if the person usually makes the person's home in the same family unit, which may include reciprocal beneficiaries, even though the person temporarily lives elsewhere."

SECTION 3. Chapter 431:10C, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§431:10C-    Exclusion of designated persons. (a) Any provision of this chapter to the contrary notwithstanding, an insurer may offer to exclude all coverage under a no-fault policy when a designated person is operating the insured motor vehicle. Any such exclusion shall be requested and agreed to by the insured as shown by the signature of the insured. The written agreement between the insurer and the insured shall be effective for each renewal of the policy by the insurer and shall remain in effect until the insurer agrees in writing to provide coverage for the designated person previously excluded from coverage.

(b) Driver exclusion endorsements shall be substantially similar to the following form:

"DRIVER EXCLUSION ENDORSEMENT

Nothing herein contained shall alter, vary, waive or extend any of the terms, conditions, agreements or limits of the under mentioned policy other than as stated herein below.

Effective -- 12:01 a.m., Hawaiian Standard Time. Attached to and forming part of Policy No.       issued to                  (name of insured) by                 (insert name of insurance company). In consideration of the premium for which the policy is written, it is agreed that the company shall not be liable, and no liability or obligation of any kind shall be attached to the company, for losses, injuries or damages sustained after the effective date of this endorsement while any motor vehicle is operated, maintained or used by                 (name of excluded driver(s)).

Date:

                                         (signature)""

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________