SB1335 - 512R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 28-4009, Arizona Revised Statutes, is amended to read:

START_STATUTE28-4009. Motor vehicle liability policy requirements; exceptions

A. Every owner of a motor vehicle that is registered or required to be registered in this state shall continuously provide, while the motor vehicle is present or registered in this state, a motor vehicle liability policy. An owner's motor vehicle liability policy shall comply with the following:

1. The policy shall designate by explicit description or by appropriate reference all motor vehicles for which coverage is granted. If coverage is provided for a fleet of seven or more motor vehicles, the maximum payable for any one accident is the limit of liability stated in the policy. There is no accumulation of coverage for each separate vehicle covered.

2. The policy shall insure the person named in the policy as the insured and any other person, as insured, using the motor vehicle or motor vehicles with the express or implied permission of the named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of the motor vehicle or motor vehicles within the United States or the Dominion of Canada, subject to limits exclusive of interest and costs, for each motor vehicle as follows:

(a) Fifteen thousand dollars because of bodily injury to or death of one person in any one accident.

(b) Subject to the limit for one person, thirty thousand dollars because of bodily injury to or death of two or more persons in any one accident.

3. By agreement in writing between a named insured and the insurer the policy may exclude as insured a person or persons designated by name when operating a motor vehicle. The written agreement between the named insured and insurer is effective for each renewal of the policy by the insurer and remains in effect until the insurer agrees in writing to provide coverage for the person or persons who were previously excluded from coverage.

B. In lieu of an owner's motor vehicle liability policy, a person may obtain an operator's motor vehicle liability policy that shall insure the person named as insured in the policy against loss from the liability imposed on the person by law for damages arising out of the use by the person of a motor vehicle whether or not owned by the person, within the same territorial limits and subject to the same limits of liability provided in subsection A of this section for an owner's motor vehicle liability policy. A person may be issued an operator's motor vehicle liability policy only if all of the following apply:

1. The number of motor vehicles that the person owns is more than the number of persons in the person's household who possess a driver license and all of the motor vehicles are free of any lien or encumbrance.

2. Each person in the person's household who possesses a driver license is covered by a motor vehicle liability policy.

3. The operator provides a list of the insured's vehicles to the insurance provider. The operator must update the list as vehicles are added or removed.

C. An owner of a motor vehicle that is registered or required to be registered in this state who holds an operator's motor vehicle liability policy may not allow another person to operate the motor vehicle if the owner knows or should have known that the other person does not have liability insurance to cover that person's own operation of that motor vehicle. An operator's motor vehicle liability policy must:

1. Not provide coverage for damages incurred while a person other than the named insured is operating a motor vehicle.

2. Provide coverage for liability incurred by the insured while a motor vehicle owned by the insured is not being operated by any person.

D. An operator's motor vehicle liability policy that complies with the limits of liability as prescribed by subsection B of this section remains in effect regardless of the state in which the vehicle is being operated.

C. E. A motor vehicle liability policy:

1. Shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged for the policy, the complete vehicle identification number of all vehicles covered by the policy, the policy period and the limits of liability.

2. Shall contain an agreement or be endorsed that insurance is provided under the policy in accordance with the coverage defined in this chapter for bodily injury and death or property damage, or both.

3. Is subject to all of the provisions of this chapter.

4. Is not required to insure liability either:

(a) Under any workers' compensation law.

(b) On account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured or while engaged in the operation, maintenance or repair of the motor vehicle.

(d) For damage to property or bodily injury caused intentionally by or at the direction of the insured.

5. Is subject to the following provisions that are not required to be in the policy:

(a) The liability of the insurance carrier with respect to the insurance required by this chapter becomes absolute when injury or damage covered by the motor vehicle liability policy occurs. The policy may not be cancelled or annulled as to that liability by an agreement between the insurance carrier and the insured after the occurrence of the injury or damage, and a statement made by the insured or someone on the insured's behalf or a violation of the policy shall not defeat or void the policy.

(b) The satisfaction by the insured of a judgment for the injury or damage is not a condition precedent to the right or duty of the insurance carrier to make payment on account of the injury or damage.

(c) The insurance carrier may settle any claim covered by the policy, and if the settlement is made in good faith, the amount of the claim is deductible from the limits of liability specified in subsection A, paragraph 2 of this section.

(d) The policy, the written application for the policy, if any, and any rider or endorsement that does not conflict with this chapter constitute the entire contract between the parties.

6. May provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for this chapter.

7. May provide for the prorating of the insurance under the policy with other valid and collectible insurance.

8. For an operator's motor vehicle liability policy, must state that:

(a) The insurer is only liable under the policy for liability incurred by the insured while the named insured is the operator of a motor vehicle or while a motor vehicle owned by the insured is not being operated by any person.

(b) The policy does not provide coverage for any vicarious liability imposed on the owner of the motor vehicle as a result of the operation by another person of a motor vehicle owned by the insured or for any liability imposed by subsection A of this section.

(c) The coverage provided by the policy may not meet the requirements of the financial responsibility laws of other states unless the extended coverage is expressly included in the policy. An operator's motor vehicle liability policy may not be delivered or issued for delivery in this state unless the insured has signed an endorsement stating that the insured has read and understood the policy and its limitations.

D. F. A policy that grants the coverage required for a motor vehicle liability policy may also grant lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy, and the excess or additional coverage is not subject to this chapter. With respect to a policy that grants the excess or additional coverage, the term "motor vehicle liability policy" applies only to that part of the coverage that is required by this section.

E. G. The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers that together meet the requirements.

F. H. A binder issued pending the issuance of a motor vehicle liability policy fulfills the requirements for the policy.

I. Subsections B and C of this section do not apply to a lessor, dealer, manufacturer or distributor of a motor vehicle, a motor carrier or any other employer who owns a motor vehicle for use in the employer's business. END_STATUTE