Assigned to TRANSIT &                                                                                                                           VETOED

 

 


 

 

ARIZONA STATE SENATE

Fifty-Third Legislature, Second Regular Session

 

VETOED

 

AMENDED

FACT SHEET FOR H.B. 2254

 

computation of time; day; portion

(NOW: minimum limits; vehicle liability insurance)

 

Purpose

 

Increases minimum coverage limits for motor vehicle liability policies issued beginning July 1, 2019. Outlines requirements of a policy declarations page for motor vehicle insurance.

 

Background

 

A motor vehicle liability policy is an owner's or an operator's policy of liability insurance that is issued by an authorized insurance carrier to the benefit of the person named as the insured. A motor vehicle liability policy must be certified as proof of financial responsibility (A.R.S. § 28‑4001).

 

Current motor vehicle liability policy limits are statutorily set as follows:

1)      $15,000 for bodily injury or death of one person in any one accident;

2)      $30,000 for bodily injury or death of two or more persons in any one accident; and

3)      $10,000 for injury or destruction of others' property in any one accident (A.R.S. § 28‑4009).

 

Underinsured motorist coverage is coverage for damages due to bodily injury or death if the motor vehicle that caused the bodily injury or death is not insured by a motor vehicle liability policy that contains the minimum required statutory coverage limits. Underinsured motorist coverage is coverage for a person if the sum of the limits of liability under all bodily injury or death liability bonds and liability insurance policies that are applicable at the time of the accident is less than the total damages for bodily injury or death resulting from that accident. Underinsured motorist coverage is not applicable to an uninsured motorist (A.R.S. § 20-259.01).

 

There may be a fiscal impact to the state General Fund if this legislation results in a change in insurance premium tax revenue or state General Fund spending by the Arizona Health Care Cost Containment System.

 

Provisions

 

1.      Requires a motor vehicle liability policy, beginning July 1, 2019, to insure the insured subject to the following minimum limits:

a)      $25,000 for bodily injury or death of one person in any one accident;

b)      $50,000 for bodily injury or death of two or more persons in any one accident; and

c)      $25,000 for injury or destruction of others' property in any one accident.

 

2.      Requires a named insured's policy declaration page to be sent to the named insured's and stipulates that the policy declaration page is valid for, extends to and covers all persons insured under the policy.

 

3.      Requires the offer of uninsured or underinsured motorist coverage limits to a named insured or applicant to be made at the time of application.

 

4.      Stipulates that an insurer does not need to make a new offer of uninsured or underinsured motorist coverage if there is a change to the statutory minimum liability limits for bodily injury or death.

 

5.      Makes technical and conforming changes.

 

6.      Becomes effective on the general effective date, applicable to automobile liability or motor vehicle liability policies issued, reinstated or renewed on or after July 1, 2019. 

 

Amendments Adopted by Committee

 

·         Adopted the strike-everything amendment.

 

Governor's Veto Message

 

The Governor indicates in his veto message that he is open to the idea of revising current minimum liability limits but that he is concerned about potential unintended consequences.

 

Senate Action                                                             House Action

 

TRANSIT       3/20/18     DPA/SE     7-0-0-0            3rd Read          4/30/18                    45-12-3

3rd Read          4/17/18                        18-12-0

 

Vetoed by the Governor 5/16/18

 

Prepared by Senate Research

May 16, 2018

KN/CU/lb