Report Title:

Motor Vehicle Ins.; PIP

 

Description:

Changes no-fault insurance coverage for personal injury protection benefits from required coverage to required optional coverage.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1432

TWENTY-FIFTH LEGISLATURE, 2009

 

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 Hawaii is one of only a few states whose motor vehicle insurance laws require coverage for personal injury protection benefits.  The law requires that the insurer must offer the coverage and the insured must accept the coverage.  The purpose of this Act is to change the coverage for personal injury protection benefits to a required optional coverage.  Specifically, the insurer must offer the coverage but the insured may reject the coverage.  This Act will thereby assist in lowering the cost of motor vehicle insurance coverage, as not everyone will accept the coverage.

     SECTION 2.  Section 431:10C-301, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a)  An insurance policy covering a motor vehicle shall provide[:

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

     (2)  Insurance] 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 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 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 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 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 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 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[.]; and

     (5)  Coverage specified in section 431:10C-304; provided that:

         (A)  The coverage required under this paragraph shall not be applicable where the insured shall reject the coverage in writing;

         (B)  The offer of coverage shall be made when a policy is first applied for or issued and also thereafter upon the issue of any renewal or replacement policy."

     SECTION 3.  Section 431:10C-304, Hawaii Revised Statutes, is amended to read as follows:

     "§431:10C-304  Obligation to pay personal injury protection benefits.  For purposes of this section, the term "personal injury protection insurer" includes personal injury protection self-insurers.  [Every] Where the insured has not rejected coverage for personal injury protection benefits, the personal injury protection insurer shall provide personal injury protection benefits for accidental harm as follows:

     (1)  Except as otherwise provided in section 431:10C-305(d), in the case of injury arising out of a motor vehicle accident, the insurer shall pay, without regard to fault, to the provider of services on behalf of the following persons who sustain accidental harm as a result of the operation, maintenance, or use of the vehicle, an amount equal to the personal injury protection benefits as defined in section 431:10C-103.5(a) payable for expenses to that person as a result of the injury:

         (A)  Any person, including the owner, operator, occupant, or user of the insured motor vehicle;

         (B)  Any pedestrian (including a bicyclist); or

         (C)  Any user or operator of a moped as defined in section 249-1;

          provided that this paragraph shall not apply in the case of injury to or death of any operator or passenger of a motorcycle or motor scooter as defined in section 286-2 arising out of a motor vehicle accident, unless expressly provided for in the motor vehicle insurance policy;

     (2)  Payment of personal injury protection benefits shall be made as the benefits accrue, except that in the case of death, payment of benefits under section 431:10C-302(a)(5) may be made immediately in a lump sum payment, at the option of the beneficiary;

     (3)  (A)  Payment of personal injury protection benefits shall be made within thirty days after the insurer has received reasonable proof of the fact and amount of benefits accrued, and demand for payment thereof.  All providers must produce descriptions of the service provided in conformity with applicable fee schedule codes;

         (B)  If the insurer elects to deny a claim for benefits in whole or in part, the insurer shall, within thirty days, notify the claimant in writing of the denial and the reasons for the denial.  The denial notice shall be prepared and mailed by the insurer in triplicate copies and be in a format approved by the commissioner.  In the case of benefits for services specified in section 431:10C-103.5(a), the insurer shall also mail a copy of the denial to the provider; and

         (C)  If the insurer cannot pay or deny the claim for benefits because additional information or loss documentation is needed, the insurer shall, within the thirty days, forward to the claimant an itemized list of all the required documents.  In the case of benefits for services specified in section 431:10C-103.5(a), the insurer shall also forward the list to the service provider;

     (4)  Amounts of benefits which are unpaid thirty days after the insurer has received reasonable proof of the fact and the amount of benefits accrued, and demand for payment thereof, after the expiration of the thirty days, shall bear interest at the rate of one and one-half per cent per month;

     (5)  No part of personal injury protection benefits paid shall be applied in any manner as attorney's fees in the case of injury or death for which the benefits are paid.  The insurer shall pay, subject to section 431:10C-211, in addition to the personal injury protection benefits due, all attorney's fees and costs of settlement or suit necessary to effect the payment of any or all personal injury protection benefits found due under the contract.  Any contract in violation of this provision shall be illegal and unenforceable.  It shall constitute an unlawful and unethical act for any attorney to solicit, enter into, or knowingly accept benefits under any contract;

     (6)  Disputes between the provider and the insurer over the amount of a charge or the correct fee or procedure code to be used under the workers' compensation supplemental medical fee schedule shall be governed by section 431:10C-308.5; and

     (7)  Any insurer who violates this section shall be subject to section 431:10C-117(b) and (c)."

     SECTION 4.  Section 431:10C-305, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a) (1)  A claim for personal injury protection benefits for accidental harm of a person who is not an occupant of any motor vehicle involved in a motor vehicle accident may be made against the insurer of any involved vehicle; provided that the insured of the involved vehicle has not rejected coverage for personal injury protection benefits; and

     (2)  The insurer against whom the claim is asserted shall process and pay the claim as if wholly responsible, but the insurer shall thereafter be entitled to recover from the insurer of all other involved vehicles proportionate contribution for the benefits paid and the cost of processing the claim[.] to the extent that the insureds of all other involved vehicles have not rejected coverage for personal injury protection benefits.

     (b)  (1)  Except as provided in paragraph (2), personal injury protection benefits shall be paid primarily from the following sources in the following conditions[:], to the extent possible:

         (A)  The insurance on the vehicle occupied by the injured person at the time of the accident; or

         (B)  The insurance on the vehicle which caused accidental harm if the injured person is a pedestrian (including a bicyclist).

          If there is no insurance on the vehicle, any other motor vehicle insurance applicable to the injured person shall apply.

               No person shall recover personal injury protection benefits from more than one insurer for accidental harm as a result of the same accident;

     (2)  All personal injury protection benefits shall be paid secondarily and net of any benefits a person is entitled to receive because of the accidental harm from workers' compensation laws; provided that:

         (A)  The total amount a person is entitled to receive for monthly earnings loss under this article shall be limited to the amount of any applicable coverage under section 431:10C-302, without any deduction of any amount received as compensation for lost earnings under any workers' compensation law;

         (B)  The aggregate of the payments from both sources shall not exceed eighty per cent of the person's monthly earnings as provided in section 431:10C-302(a)(4).  However, if the person's employer provides both workers' compensation and personal injury protection payments, the aggregate shall not exceed the person's net monthly earnings (computed by subtracting the total of federal and state income taxes and employee social security contributions from the gross monthly earnings), provided that the workers' compensation payments shall not be less than required by chapter 386; and

         (C)  This section shall not apply to benefits payable to a surviving spouse and any surviving dependent as provided under section 431:10C-304.

          If the person does not collect such benefits under the workers' compensation laws by reason of the contest of this right to so collect by the person or organization responsible for payment thereof, the injured person, if otherwise eligible, shall, nevertheless, be entitled to receive personal injury protection benefits and, upon payment thereof, the personal injury protection insurer shall be subrogated to the injured person's rights to collect such benefits."

     SECTION 5.  Section 431:19-115.5, Hawaii Revised Statutes, is amended to read as follows:

     "§431:19-115.5  Applicability of other laws to captive insurance companies writing motor vehicle insurance policies in this State.  Captive insurance companies writing motor vehicle insurance policies in this State shall be subject to sections 431:10C-102, 431:10C-103, 431:10C-107, 431:10C-108, 431:10C-109, 431:10C-112, 431:10C-115, 431:10C-119, 431:10C-120, 431:10C-207, 431:10C-211, 431:10C-212, 431:10C-213, 431:10C-215, 431:10C-301, and [431:10C-303] 431:10C-303.5 through 431:10C-315.  Captive insurance companies shall also be subject to the rules adopted by the commissioner to implement these sections."

     SECTION 6.  Section 431:10C-303, Hawaii Revised Statutes, is repealed.

     ["§431:10C-303  Right to personal injury protection benefits.  (a)  If the accident causing accidental harm occurs in this State, every person insured under this article, and such person's survivors, suffering loss from accidental harm arising out of the operation, maintenance, or use of a motor vehicle, has a right to personal injury protection benefits.

     (b)  If the accident causing accidental harm occurs outside this State, the following persons and their survivors suffering loss from accidental harm arising out of the operation, maintenance, or use of a motor vehicle, have a right to personal injury protection benefits as defined in section 431:10C-103.5(a):

     (1)  Insureds as defined in section 431:10C-103; and

     (2)  The driver and other occupants of an insured vehicle, other than a vehicle which is regularly used in the course of the business of transporting persons or property and which is one of five or more vehicles under common ownership."]

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

     SECTION 9.  This Act shall take effect on January 1, 2010.

 

INTRODUCED BY:

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