Title 31
Motor and Other Vehicles

Chapter 32
Proof of Financial Responsibility for the Future

§ 31-32-24. “Motor vehicle liability policy” defined.

(a) Certification. “Motor vehicle liability policy” as the term is used in this chapter means an “owner’s policy” or an “operator’s policy” of liability insurance, certified as provided in § 31-32-21 or 31-32-22 as proof of financial responsibility for the future, and issued, except as otherwise provided in § 31-32-22, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named in it as insured.

(b) Owner’s policy. The owner’s policy of liability insurance:

(1) Shall designate by explicit description or by appropriate reference all vehicles with respect to which coverage is to be granted by it; and

(2) Shall insure the person named in it and any other person, as insured, using any vehicle or 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 that vehicle or vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each vehicle, as follows:

(i) Twenty-five thousand dollars ($25,000) because of bodily injury to or death of one person in any one accident; and

(ii) Subject to the limit for one person, fifty thousand dollars ($50,000) because of bodily injury to or death of two (2) or more persons in any one accident; and

(iii) Twenty-five thousand dollars ($25,000) because of injury to or destruction of property of others in any one accident or seventy-five thousand dollars ($75,000) combined single limit.

(c) Operator’s policy. The operator’s policy of liability insurance shall insure the person named as insured in it against loss from the liability imposed upon him or her by law for damages arising out of the use by him or her of any motor vehicle not owned by him or her, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner’s policy of liability insurance.

(d) Required statements in policies. The motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged for that coverage, the policy period, and the limits of liability, and shall contain an agreement or be endorsed that insurance is provided under the policy in accordance with the coverage defined in this chapter as respects bodily injury and death or property damage, or both, and is subject to all the provisions of this chapter.

(e) Policy need not insure under workers’ compensation law or employees. The motor vehicle liability policy need not insure any liability under any workers’ compensation law nor any liability 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 any vehicle, nor any liability for damage to property owned by, rented to, in charge of, or transported by the insured.

(f) Provisions incorporated in policy. Every motor vehicle liability policy shall be subject to the following provisions which need not be contained in it:

(1) The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by the motor vehicle liability policy occurs; the policy may not be cancelled or annulled as to the liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his or her behalf and no violation of the policy shall defeat or void the policy.

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

(3) The insurance carrier shall have the right to settle any claim covered by the policy. If the settlement is made in good faith, the amount of it shall be deductible from the limits of liability specified in subsection (b)(2) of this section.

(4) The policy, the written application for it, if any, and any rider or endorsement which does not conflict with the provisions of this chapter, shall constitute the entire contract between the parties.

(g) Excess or additional coverage. Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy, and the excess or additional coverage shall not be subject to the provisions of this chapter. With respect to a policy which grants the excess or additional coverage, the term “motor vehicle liability policy” shall apply only to that part of the coverage which is required by this section.

(h) Reimbursement provision permitted. Any motor vehicle liability policy 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 the provisions of this chapter.

(i) Proration of insurance permitted. Any motor vehicle liability policy may provide for the prorating of the insurance it provides with other valid and collectible insurance.

(j) Multiple policies. The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet the requirements.

(k) Binders. Any binder issued pending the issuance of a motor vehicle liability policy shall be deemed to fulfill the requirements for such a policy.