THE SENATE	S.B. NO.	2855
THIRTY-SECOND LEGISLATURE, 2024
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. Section 431:10C-301, Hawaii Revised Statutes, is amended to read as follows:

"§431:10C-301 Required motor vehicle policy coverage. (a) An insurance policy covering a motor vehicle shall provide:

(1) Coverage specified in section 431:10C-304; and

(2) Insurance to pay on behalf of the owner or any operator of the insured motor vehicle using the motor vehicle with a reasonable belief that the person is entitled to operate the motor vehicle, sums [which] that the owner or operator may legally be obligated to pay for injury, death, or damage to property of others, except property owned by, being transported by, or in the charge of the insured, [which] that arise out of the ownership, operation, maintenance, or use of the motor vehicle; provided that in the case of a U-drive motor vehicle, insurance to pay on behalf of the renter or any operator of the insured motor vehicle using the motor vehicle with the express permission of the renter or lessee, sums [which] that the renter or operator may be legally obligated to pay for damage or destruction of property of others (except property owned by, being transported by, or in the charge of the renter or operator) arising out of the operation or use of the motor vehicle having coverage in an amount that is equal to or greater than the amounts set forth in section 431:10C-301(c) unless the motor vehicle is reported stolen by the owner within three days of notification of the incident; provided that the insurer and owner of a U-drive vehicle shall have the right of subrogation against the renter and operator for breach of the rental contract between owner and renter; and provided further that, in the event that any motor vehicle offered for rental or lease is involved in an accident, the lessor shall provide all information it has or obtains relevant to the accident to all other involved parties upon their request, including but not limited to information about the lessee, and the driver of the vehicle if other than the lessee.

(b) [A] Except as otherwise provided in this section, motor vehicle insurance policy shall include:

(1) Liability coverage of not less than $20,000 per person, with an aggregate limit of $40,000 per accident, for all damages arising out of accidental harm sustained as a result of any one accident and arising out of ownership, maintenance, use, loading, or unloading of a motor vehicle;

(2) Liability coverage of not less than $10,000 for all damages arising out of damage to or destruction of property including motor vehicles and including the loss of use thereof, but not including property owned by, being transported by, or in the charge of the insured, as a result of any one accident arising out of the ownership, maintenance, use, loading, or unloading, of the insured vehicle;

(3) With respect to any motor vehicle registered or principally garaged in this State, liability coverage provided therein or supplemental thereto, in limits for bodily injury or death set forth in paragraph (1), under provisions filed with and approved by the commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom; provided that the coverage required under this paragraph shall not be applicable where any named insured in the policy shall reject the coverage in writing; and

(4) Coverage for loss resulting from bodily injury or death suffered by any person legally entitled to recover damages from owners or operators of underinsured motor vehicles. An insurer may offer the underinsured motorist coverage required by this paragraph in the same manner as uninsured motorist coverage; provided that the offer of both shall:

(A) Be conspicuously displayed so as to be readily noticeable by the insured;

(B) Set forth the premium for the coverage adjacent to the offer in a manner that the premium is clearly identifiable with the offer and may be easily subtracted from the total premium to determine the premium payment due in the event the insured elects not to purchase the option; and

(C) Provide for written rejection of the coverage by requiring the insured to affix the insured's signature in a location adjacent to or directly below the offer.

(c) Each U-drive rental business shall ensure that during each rental period, the U-drive rental motor vehicle is insured under a motor vehicle insurance policy that includes:

(1) Primary insurance coverage for each U-drive rental motor vehicle amounting to no less than four times the amounts set forth in section 431:10C-301(b) for death, bodily injury, and property damage per accident, and costs of defense outside the limits;

(2) Primary insurance coverage for each U-drive rental motor vehicle for personal injury protection coverage that meets the minimum coverage amounts required by section 431:10C-103.5; and

(3) The following optional coverages, that any named insured, renter, or operator may elect to reject or purchase and that provide primary coverage for each U‑drive motor vehicle obtained and used from a U-drive rental business:

(A) Uninsured and underinsured motorist coverages as provided for in section 431:10C-301, which shall be equal to the primary liability limits specified in this subsection; provided that uninsured and underinsured motorist coverage offers shall provide for written rejection of the coverages as provided in section 431:l0C-301;

(B) Uninsured and underinsured motorist coverage stacking options as provided in section 431:l0C‑301; provided that the offer of the stacking options shall provide for written rejection as provided in section 431:l0C-301; and

(C) An offer of required optional additional insurance coverages as provided in section 431:l0C-302;

(d) If the only named insured under the motor vehicle insurance policy issued pursuant to section 431:l0C-301(c) is the U-drive rental business, the insurer or the U-drive rental business shall:

(1) Disclose the coverages in writing to the customer;

(2) Disclose to the customer in writing that all optional coverages available may not have been purchased under sections 431:10C-301 and 431:10C-302; and

(3) Obtain a written acknowledgment from the customer of receipt of the written disclosures required in paragraphs (1) and (2).

Within fifteen days after providing the disclosure to the customer, the standard disclosure forms used in paragraphs (1) and (2), and any modifications of these forms intended to be used, shall be filed with the commissioner. Within fifteen days after the filing a modified disclosure, the insurer or U-drive rental business shall send to the customer each modified disclosure form and obtain written acknowledgment from the customer. The disclosures and acknowledgment may be sent and received by electronic means.

[(c)] (e) The stacking or aggregating of uninsured motorist coverage or underinsured motorist coverage is prohibited, except as provided in subsection [(d).] (f).

[(d)] (f) An insurer shall offer the insured the opportunity to purchase uninsured motorist coverage and underinsured motorist coverage by offering the following options with each motor vehicle insurance policy:

(1) The option to stack uninsured motorist coverage and underinsured motorist coverage; and

(2) The option to select uninsured motorist coverage and underinsured motorist coverage, whichever is applicable, up to but not greater than the bodily injury liability coverage limits in the insured's policy.

These offers are to be made when a motor vehicle insurance policy is first applied for or issued. For any existing policies, an insurer shall offer [such] the coverage at the first renewal after January 1, 1993. Once an insured has been provided the opportunity to purchase or reject the coverages in writing under the options, no further offer is required to be included with any renewal or replacement policy issued to the insured.

[(e)] (g) If uninsured motorist coverage or underinsured motorist coverage is rejected, pursuant to section 431:10C‑301(b):

(1) The offers required by section [431:10C-301(d)] 431:10C-301(f) are not required to be made;

(2) No further offers or notice of the availability of uninsured motorist coverage and underinsured motorist coverage are required to be made in connection with any renewal or replacement policy; and

(3) The written rejections required by section 431:10C‑301(b) shall be presumptive evidence of the insured's decision to reject the options.

(h) The requirements of this part shall apply in the same manner to any U-Drive rental business that self-insures pursuant to section 431:10C-105."

SECTION 2. Section 431:10C-103, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition to be appropriately inserted and to read:

""U-drive motor vehicle insurance policy" means a motor vehicle insurance policy that meets the requirements set forth in section 431:10C-301(c)."

2. By amending the definitions of "insured" and "insured motor vehicle" 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, 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[.]; and

(3) A customer who rents a U-drive motor vehicle from a U‑drive motor vehicle business.

[A person resides] As used in this definition, "person residing in the same household [if the]" means a person who usually makes the person's home in the same family unit[, which may include] and includes reciprocal beneficiaries, [even though] regardless of whether the person temporarily lives elsewhere.

"Insured motor vehicle" means a motor vehicle:

(1) [Which] That is insured under a motor vehicle insurance policy; [or]

(2) The owner of which is a self-insurer with respect to [such] the vehicle[.]; or

(3) A U-drive motor vehicle."

SECTION 3. Section 431:10C-303.5, Hawaii Revised Statutes, is amended to read as follows:

"§431:10C-303.5 U-drive insurance policy; primary. [(a)] A U-drive motor vehicle insurance policy, as provided for in section 431:10C-301, shall be primary; provided that [its] the bodily injury and property damage liability coverages provided for in the operator's or renter's motor vehicle insurance policies shall be secondary to the [operator's or renter's] U‑drive motor vehicle insurance policy [if:

(1) The U-drive rental business provides any claimant or person sustaining accidental harm or damages, as a result of the operation of the rental vehicle, the identity and address of the operator or renter, along with any information available to the U-drive rental business as to the identity and address of any insurer under any liability policies applicable to the operator or renter; provided that the U-drive rental business shall make reasonable efforts to obtain such information;

(2) A suit may be filed and service upon the responsible operator or renter can be effectuated; and

(3) An insurer responds on behalf of the operator or renter to a claim or suit.

(b) In cases where the U-drive motor vehicle insurance policy is primary because of:

(1) A failure of a renter or operator to cooperate with the U-drive rental business in providing the information described in subsection (a)(1);

(2) The failure to file suit and effectuate service as described in subsection (a)(2); or

(3) The failure of an insurer to respond as described in subsection (a)(3) or defend a claim or pay required benefits or a judgment;

the U-drive rental business may recover from the renter, operator, or insurer, the sums the U-drive rental business expended in payments or benefits, along with reasonable attorneys' fees and expenses]."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

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

INTRODUCED BY:

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Report Title:

U-drive Motor Vehicles; Insurance

Description:

Clarifies U-drive motor vehicle insurance policy requirements.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.