By Seaman H.B. No. 2905
76R3108 DLF-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to uninsured and underinsured motorist coverage available
1-3 under a motor vehicle liability insurance policy.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 5.06-1, Insurance Code, is amended to
1-6 read as follows:
1-7 Art. 5.06-1. UNINSURED OR UNDERINSURED MOTORIST COVERAGE.
1-8 (a) [(1)] No automobile liability insurance (including insurance
1-9 issued through the Texas Automobile Insurance Plan Association
1-10 [pursuant to an Assigned Risk Plan established under authority of
1-11 Section 35 of the Texas Motor Vehicle Safety-Responsibility Act]),
1-12 covering liability arising out of the ownership, maintenance, or
1-13 use of any motor vehicle shall be delivered or issued for delivery
1-14 in this state unless coverage is provided therein or supplemental
1-15 thereto, [in at least the limits described in the Texas Motor
1-16 Vehicle Safety-Responsibility Act,] under provisions prescribed by
1-17 the commissioner [Board], for the protection of persons insured
1-18 thereunder who are legally entitled to recover damages from owners
1-19 or operators of uninsured or underinsured motor vehicles because of
1-20 bodily injury, sickness, or disease, including death, or property
1-21 damage resulting therefrom. The coverages required under this
1-22 Article shall not be applicable where any insured named in the
1-23 policy shall reject the coverage in writing; provided that unless
1-24 the named insured thereafter requests such coverage in writing,
2-1 such coverage need not be provided in or supplemental to a renewal
2-2 policy where the named insured has rejected the coverage in
2-3 connection with a policy previously issued to the named insured
2-4 [him] by the same insurer or by an affiliated insurer.
2-5 (b) [(2)] For the purpose of these coverages:
2-6 (1) "Exemplary damages" has the meaning assigned by
2-7 Section 41.001, Civil Practice and Remedies Code.
2-8 (2) "Noneconomic damages" means damages other than
2-9 compensatory damages for pecuniary loss. The term includes damages
2-10 for physical pain and mental anguish, loss of consortium,
2-11 disfigurement, physical impairment, or loss of companionship and
2-12 society. The term does not include exemplary damages.
2-13 (3) "Uninsured [(a) the term "uninsured] motor
2-14 vehicle" shall, subject to the terms and conditions of such
2-15 coverage, be deemed to include an insured motor vehicle where the
2-16 liability insurer thereof is unable to make payment with respect to
2-17 the legal liability of its insured within the limits specified
2-18 therein because of insolvency.
2-19 (4) "Underinsured [(b) The term "underinsured] motor
2-20 vehicle" means an insured motor vehicle on which there is valid and
2-21 collectible liability insurance coverage with limits of liability
2-22 for the owner or operator which were originally lower than, or have
2-23 been reduced by payment of claims arising from the same accident
2-24 to, an amount less than the limit of liability stated in the
2-25 underinsured coverage of the insured's policy.
2-26 (c) The commissioner [Board] may, in the policy forms
2-27 adopted under Article 5.06 of this code, define "uninsured motor
3-1 vehicle" to exclude certain motor vehicles whose operators are in
3-2 fact uninsured.
3-3 (d) The portion of a policy form adopted under Article 5.06
3-4 of this code to provide coverage under this article shall include
3-5 provisions that, regardless of the number of persons insured,
3-6 policies or bonds applicable, vehicles involved, or claims made,
3-7 the total aggregate limit of liability to any one person who
3-8 sustains bodily injury or property damage as the result of any one
3-9 occurrence shall not exceed the limit of liability for these
3-10 coverages as stated in the policy and the total aggregate limit of
3-11 liability to all claimants, if more than one, shall not exceed the
3-12 total limit of liability per occurrence as stated in the policy;
3-13 and shall provide for the exclusion of the recovery of damages for
3-14 bodily injury or property damage or both resulting from the
3-15 intentional acts of the insured. The portion of a policy form
3-16 adopted under Article 5.06 of this code to provide coverage under
3-17 this article shall require that in order for the insured to recover
3-18 under the uninsured motorist coverages where the owner or operator
3-19 of any motor vehicle which causes bodily injury or property damage
3-20 to the insured is unknown, actual physical contact must have
3-21 occurred between the motor vehicle owned or operated by such
3-22 unknown person and the person or property of the insured.
3-23 (e) Except as provided by Subsection (f) of this article,
3-24 the [(3) The] limits of liability for bodily injury, sickness, or
3-25 disease, including death, shall be offered to the insured in
3-26 amounts not less than those prescribed in Chapter 601,
3-27 Transportation Code, [the Texas Motor Vehicle Safety-Responsibility
4-1 Act] and such higher available limits as may be desired by the
4-2 insured, but not greater than the limits of liability specified in
4-3 the bodily injury liability provisions of the insured's policy.
4-4 (f) The named insured may elect to waive coverage under this
4-5 article for recovery of noneconomic and exemplary damages resulting
4-6 from bodily injury, sickness, or disease, including death. If an
4-7 insured elects to waive coverage under this subsection, Subsection
4-8 (e) of this article does not apply to the limits of liability that
4-9 are applicable to the coverage provided under the policy issued to
4-10 the named insured for damages resulting from bodily injury,
4-11 sickness, or disease, including death. The commissioner by rule may
4-12 adopt minimum limits of liability applicable to those damages.
4-13 (g) An insurer, including a county mutual insurer, shall
4-14 apply a premium discount, in an amount prescribed by the
4-15 commissioner, to an automobile liability insurance policy with
4-16 respect to which a waiver of coverage under Subsection (f) of this
4-17 article has been made. The commissioner may:
4-18 (1) adopt rules as necessary to ensure the compliance
4-19 of county mutual insurers with this subsection; and
4-20 (2) require a county mutual insurer to provide any
4-21 information regarding the rates or rating manual used by the
4-22 insurer necessary to verify the insurer's compliance with this
4-23 subsection.
4-24 (h) An insurer, including a county mutual insurer, shall
4-25 provide notice in the form prescribed by the commissioner that
4-26 coverage may be waived under Subsection (f) of this article to:
4-27 (1) each applicant for coverage at the time the
5-1 application is made; and
5-2 (2) each named insured at the time coverage is
5-3 renewed.
5-4 (i) Waiver of coverage under Subsection (f) of this article
5-5 does not affect the insured's right to bring an action for
5-6 noneconomic and exemplary damages against a responsible party.
5-7 (j) [(4) (a)] Coverage for property damage shall be offered
5-8 to the insured in amounts not less than those prescribed in Chapter
5-9 601, Transportation Code, [the Texas Motor Vehicle
5-10 Safety-Responsibility Act] and such higher available limits as may
5-11 be desired by the insured, but not greater than limits of liability
5-12 specified in the property damage liability provisions of the
5-13 insured's policy, subject to a deductible amount of $250.
5-14 (k) [(b)] If the insured has collision coverage and
5-15 uninsured or underinsured property damage liability coverage, the
5-16 insured may recover under the policy coverage chosen by the
5-17 insured. In the event neither coverage is sufficient alone to
5-18 cover all damage resulting from a single occurrence, the insured
5-19 may recover under both coverages. When recovering under both
5-20 coverages, the insured shall designate one coverage as the primary
5-21 coverage and pay the deductible applicable to that coverage. The
5-22 primary coverage must be exhausted before any recovery is made
5-23 under the secondary coverage. If both coverages are utilized in
5-24 the payment of damages from a single occurrence, the insured shall
5-25 not be required to pay the deductible applicable to the secondary
5-26 coverage when the amount of the deductible otherwise applicable to
5-27 the secondary coverage is the same as or less than the amount of
6-1 the deductible applicable to the primary coverage. If both
6-2 coverages are utilized in the payment of damages from a single
6-3 occurrence and the amount of the deductible otherwise applicable to
6-4 the secondary coverage is greater than the amount of the deductible
6-5 applicable to the primary coverage, the insured shall be required
6-6 to pay in respect of the secondary coverage only the difference
6-7 between the amount of the two deductibles. In no event shall the
6-8 insured recover under both coverages more than the actual damages
6-9 suffered.
6-10 (l) [(5)] The underinsured motorist coverage shall provide
6-11 for payment to the insured of all sums which the insured [he] shall
6-12 be legally entitled to recover as damages from owners or operators
6-13 of underinsured motor vehicles because of bodily injury or property
6-14 damage in an amount up to the limit specified in the policy,
6-15 reduced by the amount recovered or recoverable from the insurer of
6-16 the underinsured motor vehicle. If the named insured has waived
6-17 coverage under Subsection (f) of this article for recovery of
6-18 noneconomic and exemplary damages, the amount paid to the insured
6-19 shall be reduced by an amount equal to the amount of damages
6-20 attributable to noneconomic and exemplary damages.
6-21 (m) [(6)] In the event of payment to any person under any
6-22 coverage required by this Section and subject to the terms and
6-23 conditions of such coverage, the insurer making such payment shall,
6-24 to the extent thereof, be entitled to the proceeds of any
6-25 settlement or judgment resulting from the exercise of any rights of
6-26 recovery of such person against any person or organization legally
6-27 responsible for the bodily injury, sickness or disease, or death
7-1 for which such payment is made, including the proceeds recoverable
7-2 from the assets of the insolvent insurer; provided, however,
7-3 whenever an insurer shall make payment under a policy of insurance
7-4 issued pursuant to this Act, which payment is occasioned by the
7-5 insolvency of an insurer, the insured of said insolvent insurer
7-6 shall be given credit in any judgment obtained against the insured
7-7 [him], with respect to the insured's [his] legal liability for such
7-8 damages, to the extent of such payment, but, subject to Section 12
7-9 of Article 21.28-C of this code, such paying insurer shall have the
7-10 right to proceed directly against the insolvent insurer or its
7-11 receiver, and in pursuance of such right such paying insurer shall
7-12 possess any rights which the insured of the insolvent company might
7-13 otherwise have had if the insured of the insolvent insurer had made
7-14 the payment.
7-15 (n) [(7)] If a dispute exists as to whether a motor vehicle
7-16 is uninsured, the burden of proof as to that issue shall be upon
7-17 the insurer.
7-18 (o) [(8)] Notwithstanding Section 15.032, Civil Practice and
7-19 Remedies Code, an action against an insurer in relation to the
7-20 coverage provided under this article, including an action to
7-21 enforce that coverage, may be brought only:
7-22 (1) [(a)] in the county in which the policyholder or
7-23 beneficiary instituting the suit resided at the time of the
7-24 accident; or
7-25 (2) [(b)] in the county in which the accident
7-26 involving the uninsured or underinsured motor vehicle occurred.
7-27 SECTION 2. This Act takes effect September 1, 1999, and
8-1 applies only to a motor vehicle liability insurance policy that is
8-2 delivered, issued for delivery, or renewed on or after January 1,
8-3 2000. A policy that is delivered, issued for delivery, or renewed
8-4 before January 1, 2000, is governed by the law as it existed
8-5 immediately before the effective date of this Act, and that law is
8-6 continued in effect for that purpose.
8-7 SECTION 3. The importance of this legislation and the
8-8 crowded condition of the calendars in both houses create an
8-9 emergency and an imperative public necessity that the
8-10 constitutional rule requiring bills to be read on three several
8-11 days in each house be suspended, and this rule is hereby suspended.