By Gutierrez H.B. No. 2955
75R7665 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to uninsured and underinsured motorist insurance coverage.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 5.06-1, Insurance Code, is amended to
1-5 read as follows:
1-6 Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.
1-7 (1) No automobile liability insurance, [(]including insurance
1-8 issued through the Texas Automobile Insurance Plan Association
1-9 under Article 21.81 of this code [pursuant to an Assigned Risk
1-10 Plan established under authority of Section 35 of the Texas Motor
1-11 Vehicle Safety-Responsibility Act)], covering liability arising out
1-12 of the ownership, maintenance, or use of any motor vehicle may
1-13 [shall] be delivered or issued for delivery in this state unless
1-14 coverage is provided therein or supplemental thereto, in at least
1-15 the limits described by Chapter 601, Transportation Code [in the
1-16 Texas Motor Vehicle Safety-Responsibility Act], under provisions
1-17 prescribed by the commissioner [Board], for the protection of
1-18 persons insured thereunder who are legally entitled to recover
1-19 damages from owners or operators of uninsured or underinsured motor
1-20 vehicles because of bodily injury, sickness, or disease, including
1-21 death, or property damage resulting therefrom. The coverages
1-22 required under this Article shall not be applicable where any
1-23 insured named in the policy shall reject the coverage in writing;
1-24 provided that unless the named insured thereafter requests such
2-1 coverage in writing, such coverage need not be provided in or
2-2 supplemental to a renewal policy where the named insured has
2-3 rejected the coverage in connection with a policy previously issued
2-4 to him by the same insurer or by an affiliated insurer.
2-5 (2) For the purpose of this article [these coverages]:
2-6 (a) the term "uninsured motor vehicle" shall, subject
2-7 to the terms and conditions of such coverage, be deemed to include
2-8 an insured motor vehicle where the liability insurer thereof is
2-9 unable to make payment with respect to the legal liability of its
2-10 insured within the limits specified therein because of insolvency.
2-11 (b) The term "underinsured motor vehicle" means an
2-12 insured motor vehicle on which there is valid and collectible
2-13 liability insurance coverage with limits of liability for the owner
2-14 or operator which were originally lower than, or have been reduced
2-15 by payment of claims arising from the same accident to, an amount
2-16 less than the limit of liability stated in the underinsured
2-17 coverage of the insured's policy.
2-18 (c) The commissioner [Board] may, in the policy forms
2-19 adopted under Article 5.06 of this code, define "uninsured motor
2-20 vehicle" to exclude certain motor vehicles whose operators are in
2-21 fact uninsured.
2-22 (d) The portion of a policy form adopted under Article
2-23 5.06 of this code to provide coverage under this article shall
2-24 include provisions that, regardless of the number of persons
2-25 insured, policies or bonds applicable, vehicles involved, or claims
2-26 made, the total aggregate limit of liability to any one person who
2-27 sustains bodily injury or property damage as the result of any one
3-1 occurrence shall not exceed the limit of liability for these
3-2 coverages as stated in the policy and the total aggregate limit of
3-3 liability to all claimants, if more than one, shall not exceed the
3-4 total limit of liability per occurrence as stated in the policy;
3-5 and shall provide for the exclusion of the recovery of damages for
3-6 bodily injury or property damage or both resulting from the
3-7 intentional acts of the insured. The portion of a policy form
3-8 adopted under Article 5.06 of this code to provide coverage under
3-9 this article shall require that in order for the insured to recover
3-10 under the uninsured motorist coverages where the owner or operator
3-11 of any motor vehicle which causes bodily injury or property damage
3-12 to the insured is unknown, actual physical contact must have
3-13 occurred between the motor vehicle owned or operated by such
3-14 unknown person and the person or property of the insured.
3-15 (3) The limits of liability for bodily injury, sickness, or
3-16 disease, including death, shall be offered to the insured in
3-17 amounts not less than those prescribed by Chapter 601,
3-18 Transportation Code, [in the Texas Motor Vehicle
3-19 Safety-Responsibility Act] and such higher available limits as may
3-20 be desired by the insured, but not greater than the limits of
3-21 liability specified in the bodily injury liability provisions of
3-22 the insured's policy.
3-23 (4)(a) Coverage for property damage shall be offered to the
3-24 insured in amounts not less than those prescribed by Chapter 601,
3-25 Transportation Code, [in the Texas Motor Vehicle
3-26 Safety-Responsibility Act] and such higher available limits as may
3-27 be desired by the insured, but not greater than limits of liability
4-1 specified in the property damage liability provisions of the
4-2 insured's policy, subject to a deductible amount of $250.
4-3 (b) If the insured has collision coverage and
4-4 uninsured or underinsured property damage liability coverage, the
4-5 insured may recover under the policy coverage chosen by the
4-6 insured. In the event neither coverage is sufficient alone to
4-7 cover all damage resulting from a single occurrence, the insured
4-8 may recover under both coverages. When recovering under both
4-9 coverages, the insured shall designate one coverage as the primary
4-10 coverage and pay the deductible applicable to that coverage. The
4-11 primary coverage must be exhausted before any recovery is made
4-12 under the secondary coverage. If both coverages are utilized in
4-13 the payment of damages from a single occurrence, the insured shall
4-14 not be required to pay the deductible applicable to the secondary
4-15 coverage when the amount of the deductible otherwise applicable to
4-16 the secondary coverage is the same as or less than the amount of
4-17 the deductible applicable to the primary coverage. If both
4-18 coverages are utilized in the payment of damages from a single
4-19 occurrence and the amount of the deductible otherwise applicable to
4-20 the secondary coverage is greater than the amount of the deductible
4-21 applicable to the primary coverage, the insured shall be required
4-22 to pay in respect of the secondary coverage only the difference
4-23 between the amount of the two deductibles. In no event shall the
4-24 insured recover under both coverages more than the actual damages
4-25 suffered.
4-26 (5) The underinsured motorist coverage shall provide for
4-27 payment to the insured of all sums that the insured is [which he
5-1 shall be] legally entitled to recover as damages from owners or
5-2 operators of underinsured motor vehicles because of bodily injury
5-3 or property damage in an amount up to the limit specified in the
5-4 policy, reduced by the amount recovered or recoverable from the
5-5 insurer of the underinsured motor vehicle.
5-6 (6) In the event of payment to any person under any coverage
5-7 required by this Section and subject to the terms and conditions of
5-8 such coverage, the insurer making such payment shall, to the extent
5-9 thereof, be entitled to the proceeds of any settlement or judgment
5-10 resulting from the exercise of any rights of recovery of such
5-11 person against any person or organization legally responsible for
5-12 the bodily injury, sickness or disease, or death for which such
5-13 payment is made, including the proceeds recoverable from the assets
5-14 of the insolvent insurer; provided, however, whenever an insurer
5-15 shall make payment under a policy of insurance issued under this
5-16 article [pursuant to this Act], which payment is occasioned by the
5-17 insolvency of an insurer, the insured of said insolvent insurer
5-18 shall be given credit in any judgment obtained against the insured
5-19 [him], with respect to the insured's [his] legal liability for such
5-20 damages, to the extent of such payment, but, subject to Section 12
5-21 of Article 21.28-C of this code, such paying insurer shall have the
5-22 right to proceed directly against the insolvent insurer or its
5-23 receiver, and in pursuance of such right such paying insurer shall
5-24 possess any rights which the insured of the insolvent company might
5-25 otherwise have had if the insured of the insolvent insurer had made
5-26 the payment.
5-27 (7) If a dispute exists as to whether a motor vehicle is
6-1 uninsured, the insurer has the burden of proof as to that issue
6-2 [shall be upon the insurer].
6-3 (8) Notwithstanding Section 15.032, Civil Practice and
6-4 Remedies Code, an action against an insurer in relation to the
6-5 coverage provided under this article, including an action to
6-6 enforce that coverage, may be brought only:
6-7 (a) in the county in which the policyholder or
6-8 beneficiary instituting the suit resided at the time of the
6-9 accident; or
6-10 (b) in the county in which the accident involving the
6-11 uninsured or underinsured motor vehicle occurred.
6-12 (9)(a) A motor vehicle insurer may not cancel or nonrenew a
6-13 policy of motor vehicle insurance, or increase the premium or
6-14 deductible applicable to an insured, solely because the insured has
6-15 been involved in an accident with an uninsured or underinsured
6-16 motorist and has presented a claim under the coverages provided
6-17 under this article.
6-18 (b) An insured is only entitled to the protections
6-19 provided under Subdivision (a) of this subsection if:
6-20 (1) the insured is a good driver;
6-21 (2) the insured has filed not more than four
6-22 claims under the policy with the insurer; and
6-23 (3) the damages for which the claim is presented
6-24 were incurred in an accident with an uninsured or underinsured
6-25 motorist in which the named insured or other covered person was
6-26 determined by the insurer not to be at fault.
6-27 (c) The commissioner shall adopt rules as necessary to
7-1 implement this subsection.
7-2 (d) For purposes of this subsection, an individual is
7-3 a good driver if:
7-4 (1) the individual has been licensed for at
7-5 least three years to drive the type of motor vehicle covered by the
7-6 policy;
7-7 (2) during the previous three years, the
7-8 individual has not:
7-9 (A) been substantially at fault in a motor
7-10 vehicle accident that resulted in bodily injury, death, or property
7-11 damage;
7-12 (B) been convicted of a violation of a
7-13 traffic safety regulation that involved a moving vehicle; and
7-14 (C) had more than one dismissal of a
7-15 charge relating to a traffic safety regulation;
7-16 (3) the individual has never made a fraudulent
7-17 insurance claim; and
7-18 (4) the individual does not drive more than
7-19 30,000 miles annually.
7-20 (e) In this subsection, "traffic safety regulation"
7-21 means a law of this state or a political subdivision of this state
7-22 relating to the operation of motor vehicles other than a law
7-23 relating to pedestrians or to the parking of a motor vehicle.
7-24 SECTION 2. This Act takes effect September 1, 1997, and
7-25 applies only to a policy of motor vehicle insurance that is
7-26 delivered, issued for delivery, or renewed on or after January 1,
7-27 1998. A policy that is delivered, issued for delivery, or renewed
8-1 before January 1, 1998, is governed by the law as it existed
8-2 immediately before the effective date of this Act, and that law is
8-3 continued in effect for that purpose.
8-4 SECTION 3. The importance of this legislation and the
8-5 crowded condition of the calendars in both houses create an
8-6 emergency and an imperative public necessity that the
8-7 constitutional rule requiring bills to be read on three several
8-8 days in each house be suspended, and this rule is hereby suspended.