2023 -- H 5487 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO INSURANCE -- LIABILITY INSURANCE

     

     Introduced By: Representatives Dawson, O'Brien, Cardillo, Craven, Shanley, McEntee,
and Solomon

     Date Introduced: February 10, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 27-7-2.1 of the General Laws in Chapter 27-7 entitled "Liability

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Insurance" is hereby amended to read as follows:

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     27-7-2.1. Uninsured motorist coverage.

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     (a) No policy insuring against loss resulting from liability imposed by law for property

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damage caused by collision, bodily injury, or death suffered by any person arising out of the

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ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this

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state with respect to any motor vehicle registered or principally garaged in this state unless coverage

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is provided in or supplemental to the policy, for bodily injury or death in limits set forth in each

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policy, but in no instance less than the limits set forth in § 31-47-2(13)(i)(A) under provisions

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approved by the insurance commissioner, for the protection of persons insured under the policy

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who are legally entitled to recover damages from owners or operators of uninsured motor vehicles

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and hit-and-run motor vehicles because of property damage, bodily injury, sickness, or disease,

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including death, resulting from that injury, sickness, or disease. The insurer shall provide uninsured

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motorist coverage in an amount equal to the insured’s bodily injury liability limits. The named

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insured shall have the option of selecting a limit in writing less than the bodily injury liability

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coverage, but in no event less than the limits set forth in § 31-47-2(13)(i)(A), unless the named

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insured is purchasing only the minimum coverage required by compulsory insurance provisions of

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the general laws, in which case the limit can be reduced to zero, but only after signing an advisory

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notice approved by the director of business regulation concerning the hazard of uninsured and

 

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underinsured motorists. That coverage shall also apply in the case of a responsible party whose

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liability insurance carrier was insolvent at the time of the accident or became insolvent subsequent

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to the accident.

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     (b) Notwithstanding the provisions of subsection (a), the named insured shall have the

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option to reject, in writing, uninsured motorist coverage for loss resulting from damage to property.

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If the named insured has collision coverage for property damage to his or her vehicle, then no

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coverage for uninsured motorist property damage shall be required unless the insured at his or her

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option chooses to purchase that coverage.

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     (c) For the purposes of this section:

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     (1) “Policy insuring against loss” means a policy that provides primary coverage for the

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insured motor vehicle; and

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     (2) “Property damage” means injury to or destruction of the insured vehicle, including its

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loss of use and any property, excluding business property, owned by the insured while contained

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in the insured vehicle.

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     (d) After the selection of limits by the named insured or the exercise of the right to reject

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that portion of the coverage that applies to property damage, the insurer or any affiliated insurer

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shall be required to notify the policyholder, in any renewal, reinstatement, substitute, amended,

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altered, modified, transfer, or replacement policy, as to the availability of that coverage or optional

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limits. The insured may, subject to the limitations expressed in this chapter, make a written request

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for higher limits, newly added coverage, or coverage more extensive than that provided on a prior

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policy.

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     (e) Property damage caused by collision shall be subject to a two hundred dollar ($200)

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deductible per claim unless otherwise agreed. Any claim submitted under the property damage

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portion of this section must include the name, address, and other means of identification to establish

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that the at-fault operator is without insurance. The rate for this coverage will be established as a

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percentage of the existing base collision insurance rate as utilized by the majority of companies, to

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be determined by the insurance commissioner.

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     (f) Whenever, through subrogation, an insurance company or its insurance producer

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collects a casualty loss from a third party, that company or insurance producer shall, from the funds

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collected, first pay to the insured the deductible portion of the casualty loss less the prorated share

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of subrogation expense and only after this retain any funds in excess of the deductible portion of

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the recovery.

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     (g) For the purposes of this section “uninsured motorist” shall include an underinsured

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motorist. An “underinsured motorist” is the owner or operator of a motor vehicle who carries

 

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automobile liability insurance with coverage in an amount less than the limits or damages that

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persons insured pursuant to this section are legally entitled to recover because of bodily injury,

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sickness, or disease, including death, resulting from that injury, sickness, or disease.

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     (h) A person entitled to recover damages pursuant to this section shall not be required to

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make a claim against or bring an action against the uninsured or underinsured tortfeasor as a

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prerequisite to recover damages from the insurer providing coverage pursuant to this section. In the

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event that the person entitled to recover against an underinsured motorist recovers from the insurer

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providing coverage pursuant to this section, that insurer shall be entitled to subrogation rights

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against the underinsured motorist and his or her insurance carrier. Release of the tortfeasor with the

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consent of the company providing the underinsured coverage shall not extinguish or bar the claim

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of the insured against the underinsurance carrier regardless of whether the claim has been

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liquidated.

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     (i) Whenever an insured has paid two (2) or more separate premiums for uninsured

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motorists’ coverage in a single policy of insurance or under several policies with the same insurance

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company, the insured shall be permitted to collect up to the aggregate amount of coverage for all

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of the vehicles insured, regardless of any language in the policy to the contrary.

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     SECTION 2. This act shall take effect on January 1, 2024, and shall apply prospectively to

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any new or renewed policy of insurance issued or renewed after January 1, 2024.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- LIABILITY INSURANCE

***

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     This act would provide for mandatory uninsured motorist coverage.

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     This act would take effect on January 1, 2024, and would apply prospectively to any new

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or renewed policy of insurance issued or renewed after January 1, 2024.

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