H. B. 2739
(By Delegate Ryan)
[Introduced February 24, 1995; referred to the
Committee on Banking and Insurance then
the Judiciary.]
A BILL to amend and reenact section thirty-one, article six,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
insurance; the insurance policy; a motor vehicle policy;
providing that insurance policy need not cover household
members in certain situation; designating person not
permitted to operate insured motor vehicle; and prohibiting
cancellation or nonrenewal.
Be it enacted by the Legislature of West Virginia:
That section thirty-one, article six, chapter thirty-three
of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 6. THE INSURANCE POLICY.
§33-6-31. Motor vehicle policy; omnibus clause; uninsured and
underinsured motorists' coverage; conditions for
recovery under endorsement; rights and liabilities
of insurer.
(a) No policy or contract of bodily injury liability
insurance, or of property damage liability insurance, covering
liability arising from the ownership, maintenance or use of any
motor vehicle, shall be issued or delivered in this state to the
owner of such vehicle, or shall be issued or delivered by any
insurer licensed in this state upon any motor vehicle for which
a certificate of title has been issued by the department of motor
vehicles of this state, unless it shall contain a provision
insuring the named insured and any other person, except a bailee
for hire and any persons specifically excluded by any restrictive
endorsement attached to the policy, responsible for the use of or
using the motor vehicle with the consent, expressed or implied,
of the named insured or his spouse against liability for death or
bodily injury sustained, or loss or damage occasioned within the
coverage of the policy or contract as a result of negligence in the operation or use of such vehicle by the named insured or by
such person: Provided, That in any such automobile liability
insurance policy or contract, or endorsement thereto, if coverage
resulting from the use of a nonowned automobile is conditioned
upon the consent of the owner of such motor vehicle, the word
"owner" shall be construed to include the custodian of such
nonowned motor vehicles: Provided, however, That in any such
automobile liability insurance policy or contract, or endorsement
thereto, the owner of a motor vehicle may designate a member or
members of the household who is licensed to drive a motor
vehicle, but who is not permitted to drive any motor vehicle
owned by that owner without cancellation or nonrenewal of
automobile liability policy under any provision of this article,
article six-a of this chapter, or any other provision of law in
this code. Notwithstanding any other provision of this code, if
the owner of a policy receives a notice of cancellation pursuant
to article six-a of this chapter and the reason for the
cancellation is a violation of law by a person insured under the
policy, said owner may by restrictive endorsement specifically
exclude the person who violated the law and the restrictive endorsement shall be effective in regard to the total liability
coverage provided under the policy, including coverage provided
pursuant to the mandatory liability requirements of chapter
seventeen-d, article four, section two of this code, but nothing
in such restrictive endorsement shall be construed to abrogate
the "family purpose doctrine."
(b) Nor shall any such policy or contract be so issued or
delivered unless it shall contain an endorsement or provisions
undertaking to pay the insured all sums which he shall be legally
entitled to recover as damages from the owner or operator of an
uninsured motor vehicle, within limits which shall be no less
than the requirements of section two, article four, chapter
seventeen-d of the code of West Virginia, as amended from time to
time: Provided, That such policy or contract shall provide an
option to the insured with appropriately adjusted premiums to pay
the insured all sums which he shall be legally entitled to
recover as damages from the owner or operator of an uninsured
motor vehicle up to an amount of one hundred thousand dollars
because of bodily injury to or death of one person in any one
accident, and, subject to said limit for one person, in the amount of three hundred thousand dollars because of bodily injury
to or death of two or more persons in any one accident, and in
the amount of fifty thousand dollars because of injury to or
destruction of property of others in any one accident: Provided,
however, That such endorsement or provisions may exclude the
first three hundred dollars of property damage resulting from the
negligence of an uninsured motorist: Provided further, That such
policy or contract shall provide an option to the insured with
appropriately adjusted premiums to pay the insured all sums which
he shall legally be entitled to recover as damages from the owner
or operator of an uninsured or underinsured motor vehicle up to
an amount not less than limits of bodily injury liability
insurance and property damage liability insurance purchased by
the insured without setoff against the insured's policy or any
other policy. "Underinsured motor vehicle" means a motor vehicle
with respect to the ownership, operation, or use of which there
is liability insurance applicable at the time of the accident,
but the limits of that insurance are either (i) less than limits
the insured carried for underinsured motorists' coverage, or (ii)
has been reduced by payments to others injured in the accident to limits less than limits the insured carried for underinsured
motorists' coverage. No sums payable as a result of underinsured
motorists' coverage shall be reduced by payments made under the
insured's policy or any other policy.
(c) As used in this section, the term "bodily injury" shall
include death resulting therefrom, and the term "named insured"
shall mean the person named as such in the declarations of the
policy or contract and shall also include such person's spouse
if a resident of the same household, and the term "insured" shall
mean the named insured, and, while resident of the same
household, the spouse of any such named insured, and relatives of
either, while in a motor vehicle or otherwise, and any person,
except a bailee for hire, who uses, with the consent, expressed
or implied, of the named insured, the motor vehicle to which the
policy applies or the personal representative of any of the
above; and the term "uninsured motor vehicle" shall mean a motor
vehicle as to which there is no (i) bodily injury liability
insurance and property damage liability insurance both in the
amounts specified by section two, article four, chapter
seventeen-d, as amended from time to time, or (ii) there is such insurance, but the insurance company writing the same denies
coverage thereunder, or (iii) there is no certificate of self-
insurance issued in accordance with the provision of section two,
article six, chapter seventeen-d of the code of West Virginia.
A motor vehicle shall be deemed to be uninsured if the owner or
operator thereof be unknown: Provided, That recovery under the
endorsement or provisions shall be subject to the conditions
hereinafter set forth.
(d) Any insured intending to rely on the coverage required
by subsection (b) of this section shall, if any action be
instituted against the owner or operator of an uninsured or
underinsured motor vehicle, cause a copy of the summons and a
copy of the complaint to be served upon the insurance company
issuing the policy, in the manner prescribed by law, as though
such insurance company were a named party defendant; such company
shall thereafter have the right to file pleadings and to take
other action allowable by law in the name of the owner, or
operator, or both, of the uninsured or underinsured motor vehicle
or in its own name.
Nothing in this subsection shall prevent such owner or operator from employing counsel of his own choice and taking any
action in his own interest in connection with such proceeding.
(e) If the owner or operator of any motor vehicle which
causes bodily injury or property damage to the insured be
unknown, the insured, or someone in his behalf, in order for the
insured to recover under the uninsured motorist endorsement or
provision, shall:
(i) Within twenty-four hours after the insured discover, and
being physically able to report the occurrence of such accident,
the insured, or someone in his behalf, shall report the accident
to a police, peace or judicial officer, or to the commissioner of
motor vehicles, unless the accident shall already have been
investigated by a police officer;
(ii) Notify the insurance company, within sixty days after
such accident, that the insured or his legal representative has
a cause or causes of action arising out of such accident for
damages against a person or persons whose identity is unknown and
setting forth the facts in support thereof; and, upon written
request of the insurance company communicated to the insured not
later than five days after receipt of such statement, shall make available for inspection the motor vehicle which the insured was
occupying at the time of the accident; and
(iii) Upon trial establish that the motor vehicle, which
caused the bodily injury or property damage, whose operator is
unknown, was a "hit and run" motor vehicle, meaning a motor
vehicle which causes damage to the property of the insured
arising out of physical contact of such motor vehicle therewith,
or which causes bodily injury to the insured arising out of
physical contact of such motor vehicle with the insured or with
a motor vehicle which the insured was occupying at the time of
the accident. If the owner or operator of any motor vehicle
causing bodily injury or property damage be unknown, an action
may be instituted against the unknown defendant as "John Doe," in
the county in which the accident took place or in any other
county in which such action would be proper under the provisions
of article one, chapter fifty-six of this code; service of
process may be made by delivery of a copy of the complaint and
summons or other pleadings to the clerk of the court in which the
action is brought, and service upon the insurance company issuing
the policy shall be made as prescribed by law as though such insurance company were a party defendant. The insurance company
shall have the right to file pleadings and take other action
allowable by law in the name of John Doe.
(f) An insurer paying a claim under the endorsement or
provisions required by subsection (b) of this section shall be
subrogated to the rights of the insured to whom such claim was
paid against the person causing such injury, death or damage to
the extent that payment was made. The bringing of an action
against the unknown owner or operator as John Doe or the
conclusion of such an action shall not constitute a bar to the
insured, if the identity of the owner or operator who caused the
injury or damages complained of, becomes known, from bringing an
action against the owner or operator theretofore proceeded
against as John Doe. Any recovery against such owner or operator
shall be paid to the insurance company to the extent that such
insurance company shall have paid the insured in the action
brought against such owner or operator as John Doe, except that
such insurance company shall pay its proportionate part of any
reasonable costs and expenses incurred in connection therewith,
including reasonable attorney's fees. Nothing in an endorsement or provision made under this subsection, nor any other provision
of law, shall operate to prevent the joining, in an action
against John Doe, of the owner or operator of the motor vehicle
causing injury as a party defendant, and such joinder is hereby
specifically authorized.
(g) No such endorsement or provisions shall contain any
provision requiring arbitration of any claim arising under any
such endorsement or provision, nor may anything be required of
the insured except the establishment of legal liability, nor
shall the insured be restricted or prevented in any manner from
employing legal counsel or instituting legal proceedings.
(h) The provisions of subsections (a) and (b) of this
section shall not apply to any policy of insurance to the extent
that it covers the liability of an employer to his employees
under any workers' compensation law.
(i) The commissioner of insurance shall formulate and
require the use of standard policy provisions for the insurance
required by this section, but use of such standard policy
provisions may be waived by the commissioner in the circumstances
set forth in section ten of this article.
(j) A motor vehicle shall be deemed to be uninsured within
the meaning of this section, if there has been a valid bodily
injury or property damage liability policy issued upon such
vehicle, but which policy is uncollectible in whole or in part,
by reason of the insurance company issuing such policy upon such
vehicle being insolvent or having been placed in receivership.
The right of subrogation granted insurers under the provisions of
subsection (f) of this section shall not apply as against any
person or persons who is or becomes an uninsured motorist for the
reasons set forth in this subsection.
(k) Nothing contained herein shall prevent any insurer from
also offering benefits and limits other than those prescribed
herein, nor shall this section be construed as preventing any
insurer from incorporating in such terms, conditions and
exclusions as may be consistent with the premium charged.
(l) The insurance commissioner shall review on an annual
basis the rate structure for uninsured and underinsured
motorist's coverage as set forth in subsection (b) of this
section, and shall report to the Legislature on said rate
structure on or before the fifteenth day of January, one thousand nine hundred eighty-three, and on or before the fifteenth day of
January of each of the next two succeeding years.
NOTE: The purpose of this bill is to permit an owner of a
motor vehicle, which is insured by any automobile liability
policy, to designate a licensed driver of the household who is
not permitted to drive any motor vehicle owned and insured by the
owner, without cancellation or nonrenewal of the automobile
liability policy.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.