Report Title:

Motor Vehicle Insur.; Assigned Claims; Eligibility Clarified

Description:

Clarifies that persons who lack uninsured motorist coverage, but who have other coverage under their motor vehicle insurance policies, are not entitled to benefits under the assigned claims program.

THE SENATE

S.B. NO.

2008

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ASSIGNED CLAIMS.

 

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

SECTION 1. Act 14, Session Laws of Hawaii 2001 (Act 14), amended section 431:10C-408(a), Hawaii Revised Statutes (HRS). As stated in House Standing Committee Report No. 1125, the intent of the amendment was to clarify "that a person . . . does not qualify for an assigned claim if that person is entitled to uninsured motorist benefits under any applicable policy. This coverage limitation is consistent with the policy that assigned claims are provided as a measure of last resort."

Similarly, Senate Standing Committee Report No. 640 stated, "Your Committee further finds that this measure will make clear that persons who have no liability coverage applicable to them because the driver was uninsured or coverage has been denied, does not qualify for an assigned claim, if that person is entitled to uninsured motorist benefits under any applicable policy."

Based on the above, it is clear that Act 14 was intended by the legislature to limit access to coverage under an assigned claim. Unfortunately, however, the opposite has resulted. Claims are being filed by any party who has failed to purchase optional uninsured motorist coverage, although they are otherwise insured for personal injury protection and liability. The result is that these otherwise uninsured individuals are receiving such coverage for free through the assigned claims program, a result not intended by Act 14.

The purpose of this Act is to repeal the amendment to section 431:10C-408(a), HRS, effected by Act 14.

SECTION 2. Section 431:10C-408, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each person sustaining accidental harm, or such person's legal representative, may, except as provided in subsection (b), obtain the motor vehicle insurance benefits through the plan whenever:

(1) No [liability or uninsured motorist] insurance benefits under motor vehicle insurance policies are applicable to the accidental harm;

(2) No such insurance benefits applicable to the accidental harm can be identified; or

(3) The only identifiable insurance benefits under motor vehicle insurance policies applicable to the accidental harm will not be paid in full because of financial inability of one or more self-insurers or insurers to fulfill their obligations."

SECTION 3. Statutory material to be repealed is bracketed and stricken.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

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