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NAMIC 2005 Survey of New State Insurance Laws Summary and Analysis

MOTOR VEHICLE INSURANCE

Nearly one-third of all the new property and casualty laws identified in the 2005 survey pertain to regulation of the automobile insurance industry. Thirty-eight states (Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Maine, Massachusetts, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington and West Virginia) enacted motor vehicle insurance related legislation in 2005.

The slate of new motor vehicle laws is broken down into separate sub categories or issue trends including traffic safety (comprised primarily of provisions that address DUI, seat belt and child safety restraints), proof of coverage / financial responsibility, UI / UIM, salvage title, cancellation and nonrenewal requirements, driver's licenses and motor vehicle database issues, motor vehicle repair claims / shops, and miscellaneous new motor vehicle insurance laws.

The following is an overview of the new state laws relevant to each of these motor vehicle insurance issue trends.

Traffic Safety

Child safety restraint legislation was enacted in seven states: Idaho (HB 178), Illinois (HB 1565), North Dakota (SB 2208), South Carolina (SB1), Tennessee (HB 823), Washington (HB 1475) and West Virginia (SB 414). South Carolina SB1 also establishes guidelines for drivers to wear a seat belt. Louisiana HB 5 addresses increased penalties for leaving children unattended in motor vehicles.

Alaska SB 63 authorizes placement of road signs encouraging the use of seat belts at sites where motor vehicle accidents occurred resulting from the failure to use seat belts.

Connecticut HB 6722 establishes prohibitions on the use of cellular phones while operating motor vehicles. Tennessee SB 36 enacted similar legislation.

Connecticut HB 5446 expands the means of acceptable training, increased the hours of "required behind the wheel training" and restricted nighttime driving privileges for drivers under the age of 18. Hawaii HB 150 establishes a three-stage provisional licensing system for young drivers. Maryland HB 393, HB 395, SB 206, and SB 209 addressed similar issues.

Delaware passed two laws pertaining to traffic safety. The first, HB 63, prohibits minor drivers with a level 1 learner's permit from using a cell phone, while the second, HB 100, pertains to traffic light camera enforcement.

Illinois and Maryland enacted legislation similar to Delaware HB 63. Illinois SB 0210 provides that a person who holds an instruction permit or a graduated license may not use a wireless phone while driving a vehicle, subject to certain exceptions. Maryland SB 50 prohibits learner's permit holders from using specified types of wireless communication devices.

Florida HB 71 increases the severity of the offense of "drag racing". Florida HB 497 increases the civil penalty for drivers failing to obey red traffic signals.

Four states, Georgia HB 20, Illinois HB 2351, Louisiana HB 464, and Mississippi HB 734 place certain restrictions based on medical reasons for window tinting on motor vehicles. South Dakota HB 1023 repeals certain provisions regarding required labeling of motor vehicle window glaze or film.

Idaho SB 1330 extends the requirement to wear a safety helmet to persons under the age of 18 operating or riding all-terrain vehicles or motorcycles. Louisiana HB 509 provides that violations of seatbelt and motorcycle helmet statutes or ordinances shall not be included on motor vehicle operating records. Tennessee SB 928 requires drivers of motorcycles or motorized bicycles to wear a crash helmet or a bicycle helmet.

Eleven states addressed DUI and DWI related issues: Georgia, Illinois, Kansas, Massachusetts, Louisiana, Massachusetts, Montana, South Dakota, Tennessee, Virginia and West Virginia. Georgia SB 93 prohibits the use of plastic or other materials covering license plates, and provides for administration of the DUI Alcohol or Drug Use Risk Reduction Program. Illinois HB 1471 provides that a person who drives while under the influence of alcohol, drugs or intoxicating compounds is guilty of aggravated DUI if he or she has no valid driver's license or was not covered by liability insurance.

Kansas SB 148 requires all prior motor vehicle violations be taken into account when addressing DUI penalties. Massachusetts HB 4403 increases penalties for drunk drivers, and provides a penalty for knowingly permitting a vehicle not equipped with a functioning ignition interlock device to be operated by a person with an ignition interlock restricted license. Louisiana SB 157 provides criminal penalties for third, fourth and subsequent DWI offenses. Montana HB 99 establishes penalties for driving with a license that has been suspended or revoked for DUI violations. South Dakota SB 98 prohibits specific penalties for certain fifth and subsequent driving under the influence convictions.

Tennessee SB 896 increases the reasons for which a trial judge may issue a restricted driver license to a driver convicted of DUI. Tennessee HB 671 allows person whose license has been suspended for having been convicted of a driving offense and for the subsequent failure to pay a fine or cost imposed for that offense may apply to the court for issuance of a restricted license. Tennessee HB 581 authorizes judges to sentence first-time DUI offenders to remove litter from highways for 48 hours in lieu of 48 hours in jail. DUI related legislation passed in Virginia in 2005 includes HB 1896, HB 2655, HB 2668, HB 2786, HB 2822, and SB 1093. West Virginia HB 2444 requires mandatory participation in the motor vehicle alcohol test and lock program for repeat offenders.

Louisiana enacted several bills relating to traffic safety. Louisiana HB 281 provides for admissibility of state police crime lab blood and alcohol test results in civil cases. Louisiana HB 692 provides ignition interlock devices as a condition of bail in certain alcohol-related accidents. Louisiana SB 208 clarifies certain requirements with respect to tail lights on motor vehicles. Louisiana HB 16 deletes the requirement of fleeing the scene of an accident as an element of the crime of vehicular homicide.

North Carolina enacted two motor vehicle traffic safety laws. HB 35 increases the fee paid by DWI offenders for attending an alcohol and drug education traffic school. North Carolina SB 189 prohibits the operation of all-terrain vehicles by persons less than 8 years old, to restrict the operation of all-terrain vehicles by persons 8 to 15 years old based on engine capacity, to require safety training for ATV operators, and to create infractions for violations. South Dakota SB 129 amends laws restricting the use of snowmobiles by drivers under the age of 14.

Kentucky HB 39 permits any local government to erect motorcycle awareness signs in the right-of way of any highway, while Kentucky HB 139 governs traffic regulations for travel trailers and recreational vehicles. Kentucky SB 77 creates a motorcycle safety education program. South Carolina SB 307 provides the circumstance when it is lawful to drive a vehicle in the left lane of an interstate highway, and sets forth violations of this provision.

Tennessee passed several bills relating to motor vehicle traffic safety issues. HB 89 addresses habitual offenders. HB 927 increases penalties for construction of illegal entrances onto public highways. HB 1269 addresses any person who interferes with the safe operation or motorboat or other vessel. Tennessee SB 634 clarifies that when a traffic light is flashing, drivers should stop if it is flashing red and yield if it is flashing yellow. HB 370 adds school buses to the list of motor vehicles that can use flashing red and white lights. HB 821 requires that every driver of a motor vehicle exercise due care to avoid collisions with any object in the road or legally placed beside a rode. HB 1272 prohibits individuals from hunting from a stationary automobile, motor vehicle or watercraft. Tennessee SB 770 imposes a $50 fine for riding an ATV upon land of another without the landowner's permission. SB 1174 requires all persons who drive emergency vehicles to be certified and to have at least two hours of annual training. SB 1265 removes the restriction that motorcycle handlebars be less than 15 inches higher than the operator's seat.

Last, Tennessee SB 293 creates a Class B misdemeanor offense, and penalties, for methamphetamine use while driving, while SB 631 creates a Class A misdemeanor an established licensed to sell alcohol for consumption on premises selling alcoholic beverage that is dispensed by alcohol vaporizing device.

Virginia HB 1667 clarifies which highway vehicles are included within the definition of "highway vehicle".

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Proof of Coverage/ Financial Responsibility

Seventeen states (Connecticut, Colorado, Delaware, Florida, Georgia, Illinois, Iowa, Kentucky, Louisiana, Mississippi, Montana, North Dakota, Oregon, Rhode Island, Texas, Utah, and Virginia) enacted new laws in 2005 related to proof of insurance coverage / financial responsibility.

Connecticut SB 2102 creates a new Class D felony for the owner of a commercial vehicle who knowingly operates the vehicle without insurance and also requires commercial vehicle owners to file evidence of insurance with the State Department of Motor Vehicles. Colorado SB 05 clarifies that each motor vehicle carrier, not exempt under public utility laws, must maintain a motor vehicle liability insurance policy, a surety bond providing similar coverage, or provide a certificate of self-insurance. Delaware SB 20 allows for the confiscation of vehicle registration tags for vehicles determined to be uninsured.

Florida SB 52 requires a minimum amount of insurance coverage for persons engaged in retrofitting, rebuilding, or modifying commercial trucks, truck tractors or heavy trucks into dump trucks, and also provides safety standards. Georgia HB 273, in addition to authorizing the implementation of FlexAuto lanes, changes the definition of a Class C license for commercial and non commercial licenses.

Illinois HB 2510 provides that as part of proof of its financial responsibility, a contract carrier transporting employees in the course of their employment is required to verify hit and run and uninsured motor vehicle coverage. Iowa HF 870 excludes from financial responsibility laws, road construction equipment and farm implements.

Kentucky HB 63 imposes penalties on both the owner of an uninsured motor vehicle and anyone who is caught driving that vehicle, while Kentucky HB 335 amends the definition of proof of professional responsibility for motor vehicle damages. Louisiana HB 779 provides that compulsory automobile liability insurance laws apply in private parking lots.

Mississippi HB 722 increases the statutory minimum for motor vehicle liability insurance coverage. Montana SB 248 amends penalties for driving without mandatory liability insurance.

North Dakota SB 2096 requires insurance coverage to be maintained by auto dealers issuing warranties of any kind, and that such coverage is to be written only by insurers properly licensed to conduct business in the state.

Oregon SB 151 raises the motor vehicle liability coverage required for certain PIP protection benefits. Rhode Island HB 5499 requires that any evidence of proof of financial responsibility or security must include a statement that an insurance company cannot require that repairs to a motor vehicle be made at a particular auto body shop or facility.

Texas SB 1670 requires auto insurers to provide or allow access to information to verify if owners of motor vehicles have established financial responsibility. Utah HB 235 requires drivers to provide insurance information to other parties involved in an accident or to investigating officers, and also authorizes individuals injured in motor vehicle accidents to use arbitration to resolve a related claim.

Virginia HB 1663 authorizes insurance on any motor vehicle, trailer or semi-trailer that is exempt from motor vehicle registration requirements to be written under a policy other than a motor vehicle insurance policy. These registration-exempt vehicles remain exempt from the liability insurance requirements that apply to registered motor vehicles.

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Uninsured (UI) / Underinsured (UIM) Motorists Coverage

Five states (Indiana, Maine, Oregon, Utah, and Vermont) approved new provisions in 2005 that address uninsured and underinsured motorist laws. Indiana SB 125 eliminates the requirement that insurers make available uninsured motor or underinsured motorist coverage on commercial policies. Maine HP 98 establishes that the Insurance Bureau will study the legal and policy issues regarding uninsured and underinsured vehicle coverage under motor vehicle insurance policies.

Oregon passed four laws regarding UI/UIM insurance. SB 923 requires UM/UIM coverage to provide coverage for bodily injury or death when the limits for uninsured coverage equal the limits of the liability policy of the person at fault, and the amount of the liability insurance recovered is less than the limits for uninsured motor coverage of the insured. SB 924 modifies the definition of uninsured vehicle for uninsured motor coverage to include a stolen vehicle. SB 925 provides that uninsured motorist coverage is primary with respect to bodily injury to an insured while occupying a vehicle owned by a named insured. Last, SB 926 modifies the definition of uninsured vehicle for uninsured coverage by deeming a vehicle insured by a company that becomes bankrupt or insolvent an uninsured vehicle.

Utah SB 4 allows an insurer to offer additional uninsured motorist property damage coverages at appropriate premium rates.

Vermont HB 79 amends the definition of an underinsured motor vehicle and allows an individual who is reasonably claiming the right to recover damages after an accident to receive policy information without a court judgment from any other involved party's insurance company.

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Salvage Title

Three states (Kentucky, South Dakota and Tennessee) approved legislation related to accident reporting requirements. Kentucky HB 109 relates to branded titles for motor vehicles. South Dakota HB 1202 establishes provisions to regulate salvage titles. Tennessee SB 2289 increases the maximum fee for each conversation of a vehicle salvage document to a rebuilt title.

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Cancellation and Nonrenewal Requirements

Six states (Arkansas, Arizona, California, Florida, Maine and West Virginia) approved new laws in 2005 that relate to cancellation and nonrenewal requirements.

Arkansas HB 1781 provides that no motor vehicle liability insurer shall, solely as a result of an accident or injury in which a person was not at fault, cancel the person's insurance policy, increase the premium during the term or upon renewal of the policy, or lower or otherwise negatively impact the person's risk rating. Arizona HB 2194 allows insurers to transfer a policyholder to an affiliated insurer if the rates charged by the new insurer are the same as the rates charged by the original insurer. California SB 150 requires the insurance carrier or agent responsible for an adverse underwriting decision to provide the specific reasons for cancellations, nonrenewals, and declinations. Among other issues, Florida HB 19 authorizes an insurer to cancel the "non-cancelable" policy if the driver's license of insured is suspended or revoked.

Maine SP 154 establishes an exemption for insurers of vehicle fleets of three or more vehicles with commercial auto coverage from the requirement to notify the Secretary of State when coverage is cancelled, terminated or lapsed. Maine HP 467 allows for a 15-day reconciliation period for the Secretary of State to reconcile the cancellation, termination or lapse of automobile insurance for reinstatement of coverage or new coverage.

West Virginia SB 735 relates to cancellation of motor vehicle policies.

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Driver's Licenses and Motor Vehicle Database Issues

New laws regulating driver's licenses, other identification, and motor vehicle databases were passed in nine states: Georgia, Kentucky, Louisiana, Mississippi, Rhode Island, South Carolina, South Dakota, Utah, and Virginia.

Georgia HB 501 anticipates the transfer of the motor vehicle database to the Department of Revenue, and HB 577 prohibits the requirement of fingerprinting and similar identification of applicants for driver's licenses and identification cards.

Kentucky HB 196 permits the issuance of a personal identification card to the holder of an instruction permit or an operator's license.

Louisiana HB 101 authorizes the suspension of a driver's license for offenses involving unlawful purchase or possession of alcoholic beverages. Louisiana HB 270 authorizes the issuance of a temporary driver's permit electronically under certain circumstances.

Mississippi HB 1238 requires the Department to maintain a database of insured motorists. Mississippi SB 2957 provides that the driver's license application is to clearly list all documentation required on the face of the application.

Rhode Island HB 5045 establishes penalties for drivers who have never applied for a driver's license or who otherwise operate a motor vehicle without a driver's license.

Rhode Island HB 5965 and SB 732 amend provisions relating to the commercial driver licenses.

South Carolina HB 3126 relates to the issuance, content, possession, and display of a vehicle registration card. South Carolina SB 737 provides for the operation, titling and sale of low speed vehicles, and makes other changes to driver's licenses.

South Carolina SB 406 makes several changes to the commercial driver's license program to comply with the Federal Motor Carrier Safety Regulations.

South Dakota HB 1061 amends laws governing commercial driver's license standards, as does West Virginia HB 2802.

Utah SB 227 modifies provisions relating to obtaining a Utah driver's license and prohibits nonresidents from being able to obtain a license.

Driver's license related legislation passed in Virginia includes HB 2193, HB 2509, HB 2664, SB 821, SB 965, SB 972, SB 1093, SB 1198 (commercial), and SB 1205.

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Motor Vehicle Repair Claims / Shops

New laws regulating the trade practices and payment arrangements between insured, insurers and repair shops also emerge from five states among the many new motor vehicle insurance laws enacted this year. These states are Louisiana, Maine, Minnesota, North Carolina, and Rhode Island.

Louisiana HB 761 allows air bags to be calculated to determine if a vehicle is a total loss under the insurance policy if the policyholder agrees. The Minnesota legislature (SF 1379/HF 1529) enacted similar legislation.

Maine HP 235 prohibits auto insurers from steering claimants to particular repair shops, auto glass shops or garages, and prohibits insurers from denying claims due to claimant refusal to have damages repaired at such facility.

Minnesota HF 1528/SF 1380 requires that disclosure language be provided to all claimants, upon initial notification of claim, and requires that on notification of a vendor preference by claimant, all attempts to influence the choice of a shop must stop.

North Carolina HB 1227 clarifies the motor vehicle repair act and amends the motor vehicle franchise laws. HB 1299 clarifies what the cost of repair work consists of when determining whether the cost of repair work is sufficient to require a motor vehicle repair shop to prepare a written repair estimate.

Rhode Island HB 6140 requires repair shops to display notices indicating that insurers may not require repairs to be made at particular repair shops. HB 5494 includes in the definition of an unfair claims practice any act or practice of intimidation and coercion for or against any insured to use a particular rental car company.

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Miscellaneous New Motor Vehicle Insurance Laws

In addition to the subcategories of motor vehicle laws listed above, several states approved other legislation. They include:

Arkansas (HB 1391) and Idaho (HB 2080) enacted legislation increasing the amount of property damage from a motor vehicle accident for reporting accidents.

Nevada AB 315 requires disclosure of certain event recording devices in motor vehicles, restricts the use of data retrieved from such devices, and establishes related penalties. North Dakota (SB 2200) and Texas (HB 160) passed similar legislation.

Arizona (SB 1084) allows motor vehicle insurers to discontinue insurance for an employee upon termination of employment. California (SB 20) extends the sunset of the low-cost automobile insurance program in San Francisco and Los Angeles counties until January 1, 2007, and extends the program to six other counties.

Colorado HB 1250 amends provisions regarding disclosures required to be made about medical payments coverage associated with automobile insurance.

Florida SB 276 establishes a statewide wrecker company registration and wrecker operator certification system. Florida SB 492 also makes a number of changes regulating the towing or removal of vehicles, vessels and mobile homes.

Georgia enacted several laws. HB 151 extends the Department of Motor Vehicle Safety Pilot program; HB 364 requires proof of payment of sales and use tax as a precondition of titling certain motor vehicles; and HB 455 includes the use of the vehicle identification number on temporary license places. Hawaii HB 390 repealed the rental motor vehicle surcharge tax levied between September 1, 1999 and August 31, 2007.

Hawaii HB 390 repealed the rental motor vehicle surcharge tax levied between September 1, 1999 and August 31, 2007.

Idaho HB 130 allows any person involved in a motor vehicle collision that is investigated by a law enforcement agency, or their legal representation, to have a complete, unaltered copy of the collision report.

Kentucky HB 323 establishes an Off-Road Motorcycle and ATV Commission. Kentucky HB 426 eliminates the set 5-year motor vehicle re-plating schedule, allowing an alternate schedule to be established. Louisiana HB 188 deals with the limitation of coverage and potential recovery of the named insured or spouse or other family member for whom the policy provides coverage to less than the highest policy limit. Louisiana HB 278 clarifies definitions applicable to the limitation of liability for motorized off-road vehicle activities. Louisiana HB 700 provides that customer assistance is included in the coverage of vehicle mechanical breakdown policies. Maryland SB 97 requires insurers who alter specified information under a motor vehicle liability policy to include such alteration information in a notice to the insured.

Mississippi HB 653 authorizes the Department of Public Safety to provide certain information from vehicle history reports, while HB 1041 authorizes the Department to collect additional fees for performing commercial driver background checks. Mississippi SB 2743 affords consumers access to historical information on vehicle-specific accident data.

Montana SB 175 requires law enforcement representatives to furnish copies of accident reports to injured parties or their legal representatives and to insurers within seven days upon written request for such information.

North Carolina's legislature passed several motor vehicle related bills in 2005. They include: HB 988, which excludes highway use taxes as a factor in determining the true value in money of motor vehicles for property tax purposes; HB 217, which makes it unlawful to drive away from or otherwise leave the scene of a motor vehicle accident in certain circumstances; HB 761, which permits the Department of Crime Control and Public Safety to place out of service a for hire motor vehicle in violation of the registration and insurance certification requirements; HB 1236, which specifies membership on the Auto Reinsurance Facility; HB 1295, which clarifies the maximum weight of a motor vehicle that is subject to the new motor vehicles warranties act; HB 1392, which creates a Class H felony offense for failure to return a hired motor vehicle valued in excess of $4000; HB 1430, which limits the penalty for obstructing a boat ramp; HB 1779, which creates a combined motor vehicle registration renewal and property tax collection system; and HB 116, which clarifies present use value eligibility, to amend the period for appeal of a present use value determination or appraisal, to modify the tax year for motor vehicles that are to be switched from an annual system of registration to a staggered system effective January 1, 2006, and to apply the same penalty that currently applies to payments by check to property tax payments made by electronic payments.

North Dakota SB 2047 addresses several issues, including nonmoving vehicle accidents and requiring a person to be in or on the vehicle unless a pedestrian is struck.

Rhode Island HB 6248 increases the number of members on the Auto Collision Repair Licensing Advisory Board, and allows the Board to submit unresolved issues related to its jurisdiction, or relating to the scope of the statue, to the Director of the Department of Business Regulation for resolution.

South Carolina HB 3312 revises the definition of farm truck. South Carolina SB 106 provides that a provision affecting a motor carrier transportation contract that indemnifies, defends or holds harmless the contract's promise from or against liability or loss or damage resulting from negligence or intentional acts. South Carolina SB 424 also provides that the Division of Motor Vehicles must annually report registration and license fees and penalties it collected for farm trucks and self-propelled property carrying vehicles.

South Dakota HB 1115 requires supplemental coverages be made available with automobile liability policies.

Tennessee SB 154 establishes the presumption of damages for default judgments in subrogation actions. Tennessee SB 1089 authorizes a county clerk to establish an amnesty plan for delayed and reduced payment of certain outstanding judgments based on failure to pay local fines by persons whose licenses have been suspended.

Utah SB 207 provides that if a claim is brought by the named insured or other covered person, liability coverage may not be stepped down because a permissive user, named insured or household or family member driving a covered vehicle is at fault in an accident.

Virginia's legislature passed several bills in 2005. HB 1672 provides a mechanism for correcting errors made in the motor vehicle title process. HB 1736 prohibits motor vehicle manufacturers and distributors from requiring retail dealers to offer to sell, or sell, any extended service contract or extended maintenance plan. HB 1745 provides that the daily rental vehicle fee will be implemented, enforced and collected like rental taxes. HB 2189 authorizes permanent registration for buses. HB 2199 increases motorcycle vehicle inspection fees. HB 2293 authorizes creation of electronic certificates of title. HB 2434 exempts private inspection stations that inspect only company-owned or leased or government-owned or leased vehicles from the requirement that inspection stations carry at least $500,000 garage liability insurance coverage. HB 1674 includes juvenile defendants in existing provisions that allow localities to seek reimbursement of expenses related to providing an emergency response to certain traffic and DUI incidents. HB 1722 permits judges to restrict licenses at their discretion.

Other Virginia motor vehicle related legislation in 2005 includes HB 2418 (speed limits, defined), HB 2435 (notice of vehicle impoundment), and SB 1234 (regarding issuing new title on presentation of title from another state.)

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Also Inside This Summary

The following provides a brief summary and analysis of each of the notable key issue trends that emerge from NAMIC's 2005 listing of new laws.

Search for an Issue Overview

Workers' Compensation

Tort Reform

Identify Theft

Catastrophe Related Legislation

Military Personnel Insurance Related Legislation

Additional Emerging New Law Issue Trends