Report Title:

Motor Vehicle Insurance; Named Insured Exclusion

 

Description:

Permits insurer to exclude from coverage under a motor vehicle insurance policy any person specifically designated by the insurer and acknowledged by the insured.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

263

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

"431:10C- Exclusion of designated persons. (a) An insurer may exclude from coverage under a motor vehicle insurance policy any person operating a motor vehicle and specifically designated or excluded by the insurer. Any such exclusion shall be acknowledged by the signature of the named insured. The written agreement between an insurer and the named insured shall be effective for each renewal of the policy by an insurer and shall remain in effect until the insurer and named insured agree in writing to provide coverage for the person or persons who were previously excluded from coverage.

(b) 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 (date) 12:01 a.m., Hawaii Standard Time. Attached to the forming part of Policy No.      issued to (name of insured) by (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 or used by (insert name of excluded driver(s)).

Date:                       

(signature)        "

SECTION 3. Section 431:10C-103, Hawaii Revised Statutes, is amended by amending the definition of "insured" to read as follows:

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

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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