31A-22-303 - Motor vehicle liability coverage. - Utah Statutes

31A-22-303. Motor vehicle liability coverage.
(1) (a) In addition to complying with the requirements of Chapter 21, Insurance Contractsin General, and Chapter 22, Part 2, Liability Insurance in General, a policy of motor vehicleliability coverage under Subsection 31A-22-302(1)(a) shall:
(i) name the motor vehicle owner or operator in whose name the policy was purchased,state that named insured's address, the coverage afforded, the premium charged, the policyperiod, and the limits of liability;
(ii) (A) if it is an owner's policy, designate by appropriate reference all the motor vehicleson which coverage is granted, insure the person named in the policy, insure any other personusing any named motor vehicle with the express or implied permission of the named insured,and, except as provided in Section 31A-22-302.5, insure any person included in Subsection(1)(a)(iii) against loss from the liability imposed by law for damages arising out of theownership, maintenance, or use of these motor vehicles within the United States and Canada,subject to limits exclusive of interest and costs, for each motor vehicle, in amounts not less thanthe minimum limits specified under Section 31A-22-304; or
(B) if it is an operator's policy, insure the person named as insured against loss from theliability imposed upon him by law for damages arising out of the insured's use of any motorvehicle not owned by him, within the same territorial limits and with the same limits of liabilityas in an owner's policy under Subsection (1)(a)(ii)(A);
(iii) except as provided in Section 31A-22-302.5, insure persons related to the namedinsured by blood, marriage, adoption, or guardianship who are residents of the named insured'shousehold, including those who usually make their home in the same household but temporarilylive elsewhere, to the same extent as the named insured;
(iv) where a claim is brought by the named insured or a person described in Subsection(1)(a)(iii), the available coverage of the policy may not be reduced or stepped-down because:
(A) a permissive user driving a covered motor vehicle is at fault in causing an accident;or
(B) the named insured or any of the persons described in this Subsection (1)(a)(iii)driving a covered motor vehicle is at fault in causing an accident; and
(v) cover damages or injury resulting from a covered driver of a motor vehicle who isstricken by an unforeseeable paralysis, seizure, or other unconscious condition and who is notreasonably aware that paralysis, seizure, or other unconscious condition is about to occur to theextent that a person of ordinary prudence would not attempt to continue driving.
(b) The driver's liability under Subsection (1)(a)(v) is limited to the insurance coverage.
(c) (i) "Guardianship" under Subsection (1)(a)(iii) includes the relationship between afoster parent and a minor who is in the legal custody of the Division of Child and FamilyServices if:
(A) the minor resides in a foster home, as defined in Section 62A-2-101, with a fosterparent who is the named insured; and
(B) the foster parent has signed to be jointly and severally liable for compensatorydamages caused by the minor's operation of a motor vehicle in accordance with Section53-3-211.
(ii) "Guardianship" as defined under this Subsection (1)(c) ceases to exist when a minordescribed in Subsection (1)(c)(i)(A) is no longer a resident of the named insured's household.
(2) (a) A policy containing motor vehicle liability coverage under Subsection

31A-22-302(1)(a) may:
(i) provide for the prorating of the insurance under that policy with other valid andcollectible insurance;
(ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;
(iii) if the policy is issued to a person other than a motor vehicle business, limit thecoverage afforded to a motor vehicle business or its officers, agents, or employees to theminimum limits under Section 31A-22-304, and to those instances when there is no other validand collectible insurance with at least those limits, whether the other insurance is primary,excess, or contingent; and
(iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other thanthe motor vehicle business or its officers, agents, or employees to the minimum limits underSection 31A-22-304, and to those instances when there is no other valid and collectible insurancewith at least those limits, whether the other insurance is primary, excess, or contingent.
(b) (i) The liability insurance coverage of a permissive user of a motor vehicle owned bya motor vehicle business shall be primary coverage.
(ii) The liability insurance coverage of a motor vehicle business shall be secondary to theliability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).
(3) Motor vehicle liability coverage need not insure any liability:
(a) under any workers' compensation law under Title 34A, Utah Labor Code;
(b) resulting from bodily injury to or death of an employee of the named insured, otherthan a domestic employee, while engaged in the employment of the insured, or while engaged inthe operation, maintenance, or repair of a designated vehicle; or
(c) resulting from damage to property owned by, rented to, bailed to, or transported bythe insured.
(4) An insurance carrier providing motor vehicle liability coverage has the right to settleany claim covered by the policy, and if the settlement is made in good faith, the amount of thesettlement is deductible from the limits of liability specified under Section 31A-22-304.
(5) A policy containing motor vehicle liability coverage imposes on the insurer the dutyto defend, in good faith, any person insured under the policy against any claim or suit seekingdamages which would be payable under the policy.
(6) (a) If a policy containing motor vehicle liability coverage provides an insurer with thedefense of lack of cooperation on the part of the insured, that defense is not effective against athird person making a claim against the insurer, unless there was collusion between the thirdperson and the insured.
(b) If the defense of lack of cooperation is not effective against the claimant, afterpayment, the insurer is subrogated to the injured person's claim against the insured to the extentof the payment and is entitled to reimbursement by the insured after the injured third person hasbeen made whole with respect to the claim against the insured.
(7) A policy of motor vehicle liability coverage may limit coverage to the policyminimum limits under Section 31A-22-304 if the insured motor vehicle is operated by a personwho has consumed any alcohol or any illegal drug or illegal substance if the policy or aspecifically reduced premium was extended to the insured upon express written declarationexecuted by the insured that the insured motor vehicle would not be so operated.
(8) (a) When a claim is brought exclusively by a named insured or a person described inSubsection (1)(a)(iii) and asserted exclusively against a named insured or an individual described

in Subsection (1)(a)(iii), the claimant may elect to resolve the claim:
(i) by submitting the claim to binding arbitration; or
(ii) through litigation.
(b) Once the claimant has elected to commence litigation under Subsection (8)(a)(ii), theclaimant may not elect to resolve the claim through binding arbitration under this section withoutthe written consent of both parties and the defendant's liability insurer.
(c) (i) Unless otherwise agreed on in writing by the parties, a claim that is submitted tobinding arbitration under Subsection (8)(a)(i) shall be resolved by a panel of three arbitrators.
(ii) Unless otherwise agreed on in writing by the parties, each party shall select anarbitrator. The arbitrators selected by the parties shall select a third arbitrator.
(d) Unless otherwise agreed on in writing by the parties, each party will pay the fees andcosts of the arbitrator that party selects. Both parties shall share equally the fees and costs of thethird arbitrator.
(e) Except as otherwise provided in this section, an arbitration procedure conductedunder this section shall be governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act,unless otherwise agreed on in writing by the parties.
(f) (i) Discovery shall be conducted in accordance with Rules 26b through 36, UtahRules of Civil Procedure.
(ii) All issues of discovery shall be resolved by the arbitration panel.
(g) A written decision of two of the three arbitrators shall constitute a final decision ofthe arbitration panel.
(h) Prior to the rendering of the arbitration award:
(i) the existence of a liability insurance policy may be disclosed to the arbitration panel;and
(ii) the amount of all applicable liability insurance policy limits may not be disclosed tothe arbitration panel.
(i) The amount of the arbitration award may not exceed the liability limits of all thedefendant's applicable liability insurance policies, including applicable liability umbrella policies. If the initial arbitration award exceeds the liability limits of all applicable liability insurancepolicies, the arbitration award shall be reduced to an amount equal to the liability limits of allapplicable liability insurance policies.
(j) The arbitration award is the final resolution of all claims between the parties unlessthe award was procured by corruption, fraud, or other undue means.
(k) If the arbitration panel finds that the action was not brought, pursued, or defended ingood faith, the arbitration panel may award reasonable fees and costs against the party that failedto bring, pursue, or defend the claim in good faith.
(l) Nothing in this section is intended to limit any claim under any other portion of anapplicable insurance policy.
(9) An at-fault driver or an insurer issuing a policy of insurance under this part that iscovering an at-fault driver may not reduce compensation to an injured party based on the injuredparty not being covered by a policy of insurance that provides personal injury protection coverageunder Sections 31A-22-306 through 31A-22-309.

Amended by Chapter 172, 2010 General Session