Bill Text: CA SB1107 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Vehicles: insurance.
Spectrum: Moderate Partisan Bill (Democrat 7-1)
Status: (Passed) 2022-09-28 - Chaptered by Secretary of State. Chapter 717, Statutes of 2022. [SB1107 Detail]
Download: California-2021-SB1107-Amended.html
(A)What what percentage of policyholders with fifteen thousand dollars ($15,000) and thirty thousand dollars ($30,000)
uninsured and underinsured motorist coverage ever obtain recovery under this coverage. proper property of others in any one accident. dollars($30,000), dollars ($30,000), and, subject to the limit of thirty thousand dollars ($30,000) for each person injured or killed, of at least sixty thousand dollars ($60,000) for the injury to, or the death of, two or more persons in any one accident, and for damages to property in
excess of one thousand dollars ($1,000), of at least fifteen thousand dollars ($15,000) resulting from any one accident. Proof of financial responsibility may be given in any manner authorized in this chapter.
Bill Title: Vehicles: insurance.
Spectrum: Moderate Partisan Bill (Democrat 7-1)
Status: (Passed) 2022-09-28 - Chaptered by Secretary of State. Chapter 717, Statutes of 2022. [SB1107 Detail]
Download: California-2021-SB1107-Amended.html
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Amended
IN
Senate
May 19, 2022 |
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Amended
IN
Senate
April 21, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Senate Bill
No. 1107
| Introduced by Senator Dodd (Coauthors: Senators Archuleta, Laird, Umberg, and Wieckowski) (Coauthors: Assembly Members Grayson, Quirk, and Voepel) |
February 16, 2022 |
An act to amend Section 11580.2 of, and to add Section 12960 to, the Insurance Code, and to amend, repeal, and add Sections 16056, 16430, 16435, 16451, and 16500 of, the Vehicle Code, relating to vehicles.
LEGISLATIVE COUNSEL'S DIGEST
SB 1107, as amended, Dodd.
Vehicles: insurance.
Existing law generally regulates classes of insurance, including automobile insurance. Existing law requires a policy, or an endorsement, of bodily injury liability insurance covering liability arising out of the ownership, maintenance, or use of a motor vehicle to contain coverage for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle, except as specified. Existing law requires underinsured motorist coverage to be offered with limits equal to the limits of liability for the insured’s uninsured motorist limits in the underlying policy. Under existing law, if bodily injury is caused by an insured, uninsured, or underinsured motor vehicle, defined as a motor vehicle that is insured, but for an amount less than the uninsured motorist limits carried on the motor vehicle of the injured person, then the maximum liability of the insurer providing the
underinsured motorist coverage cannot exceed the underinsured motorist coverage limits, less the amount paid to the insured by or for a person or organization liable for the injury. Under existing law, an insurer paying a claim caused by an underinsured vehicle is entitled to reimbursement or credit in the amount received by the insured from the owner or operator of the underinsured motor vehicle or the insurer of the owner or operator.
Existing law prohibits adding, combining, or stacking the limit of liability for two or more vehicles or policies to determine the insurance coverage limit available to an injured person.
This bill would require the Insurance Commissioner to undertake a study to determine the impact on rate, policy cost, and consumer take up of uninsured motorist and underinsured
motorist polices policies if “underinsured motor vehicle” were defined as an insured motor vehicle that has liability coverage less than the total damages suffered by the injured person or persons, and if the underinsured motorist coverage provisions eliminated the reimbursement or credit given to the insurer to account for payment made by the at-fault driver or their insurer, as specified, and if the prohibition of adding, combining, and stacking of liability limits were eliminated. specified. The bill would require the
commissioner to conduct another study to determine what percentage of policyholders with $15,000 and $30,000 uninsured and underinsured motorist coverage ever obtain recovery, and what impact a written disclosure explaining the purposes of uninsured and underinsured motorist coverage would have on consumers who carry uninsured and underinsured motorist coverage with limits less than their liability coverage.
recovery. The bill would require the commissioner to report their findings to the committees of the Legislature having jurisdiction over the business of insurance by December 31, 2023.
Existing law requires an owner or operator of a motor vehicle, or an owner of a vehicle used to transport passengers for hire not regulated by the Public Utilities Commission, to maintain liability insurance coverage for the named insured and any other person using the vehicle with permission in the amount of $15,000 for the bodily injury or death of any one person, $30,000 for the bodily injury or death of all persons, and $5,000 for damage to the property of others resulting from any one accident. Existing law defines “proof of financial responsibility” for purposes of the provisions requiring an owner or operator of a motor vehicle to maintain proof of financial responsibility in these amounts, as specified, or to deposit $35,000 with the
department. Under existing law, a violation of the Vehicle Code is a crime.
This bill would, commencing on January 1, 2025, increase the amount of liability insurance coverage an owner or operator of a motor vehicle, and an owner of a vehicle used to transport passengers for hire not regulated by the Public Utilities Commission, is required to maintain to $30,000 for bodily injury or death of one person, $60,000 for bodily injury or death of all persons, and $15,000 for damage to the property of others as a result of any one accident. The bill would also increase the deposit to $75,000. The bill would, by February 1, 2023, require the Insurance Commissioner to distribute a bulletin to solicit rate applications. The bill would require the rate applications due by July 1, 2023, and a rate change would be effective on or after January 1, 2025. The bill, on January 1, 2035, and January 1, 2045, would increase the minimum limits of liability insurance coverage by $10,000
and $20,000 for bodily injury or death of one person and all persons, respectively, and by $5,000 for property damage, and increase the minimum cash deposit by $25,000. The bill would, by July 1, 2033, and July 1, 2043, require the commissioner to solicit rate submissions to effectuate the January 1, 2035, and January 1, 2045, liability limit increases. Because the bill would expand the application of an existing crime, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This
bill would become operative only if SB 1155 of the 2021–22 Regular Session is enacted and takes effect on or before January 1, 2023.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 11580.2 of the Insurance Code is amended to read:11580.2.
(a) (1) No policy of bodily injury liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle, except for policies that provide insurance in the Republic of Mexico issued or delivered in this state by nonadmitted Mexican insurers, shall be issued or delivered in this state to the owner or operator of a motor vehicle, or shall be issued or delivered by any insurer licensed in this state upon any motor vehicle then principally used or principally garaged in this state, unless the policy contains, or has added to it by endorsement, a provision with coverage limits at least equal to the limits specified in subdivision (m) and in no case less than the financial responsibility requirements specified in Section 16056 of the Vehicle Code insuring the insured, the insured’s heirs or legal representative for all sums within the limits that they shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle. The insurer and any named insured, prior to or subsequent to the issuance or renewal of a policy, may, by agreement in writing, in the form specified in paragraph (2) or paragraph (3), (1) delete the provision covering damage caused by an uninsured motor vehicle completely, or (2) delete the coverage when a motor vehicle is operated by a natural person or persons designated by name, or (3) agree to provide the coverage in an amount less than that required by subdivision (m) but not less than the financial responsibility requirements specified in Section 16056 of the Vehicle Code. Any of these agreements by any named insured or agreement for the amount of coverage shall be binding upon every insured to whom the policy or endorsement provisions apply while the policy is in force, and shall continue to be so binding with respect to any continuation or renewal of the policy or with respect to any other policy that extends, changes, supersedes, or replaces the policy issued to the named insured by the same insurer, or with respect to reinstatement of the policy within 30 days of any lapse thereof. A policy shall be excluded from the application of this section if the automobile liability coverage is provided only on an excess or umbrella basis. Nothing in this section shall require that uninsured motorist coverage be offered or provided in any homeowner policy, personal and residents’ liability policy, comprehensive personal liability policy, manufacturers’ and contractors’ policy, premises liability policy, special multiperil policy, or any other policy or endorsement where automobile liability coverage is offered as incidental to some other basic coverage, notwithstanding that the policy may provide automobile or motor vehicle liability coverage on insured premises or the ways immediately adjoining.(2) The agreement specified in paragraph (1) to delete the provision covering damage caused by an uninsured motor vehicle completely or delete the coverage when a motor vehicle is operated by a natural person or persons designated by name shall be in the following form:
“The California Insurance Code requires an insurer to provide uninsured motorists coverage in each bodily injury liability insurance policy it issues covering liability arising out
of the ownership, maintenance, or use of a motor vehicle. Those provisions also permit the insurer and the applicant to delete the coverage completely or to delete the coverage when a motor vehicle is operated by a natural person or persons designated by name. Uninsured motorists coverage insures the insured, the insured’s heirs, or legal representatives for all sums within the limits established by law, that the person or persons are legally entitled to recover as damages for bodily injury, including any resulting sickness, disease, or death, to the insured from the owner or operator of an uninsured motor vehicle not owned or operated by the insured or a resident of the same household. An uninsured motor vehicle includes an underinsured motor vehicle as defined in subdivision (p) of Section 11580.2 of the Insurance Code.”
The agreement may contain
additional statements not in derogation of or in conflict with the foregoing. The execution of the agreement shall relieve the insurer of liability under this section while the agreement remains in effect.
(3) The agreement specified in paragraph (1) to provide coverage in an amount less than that required by subdivision (m) shall be in the following form:
“The California Insurance Code requires an insurer to provide uninsured motorists coverage in each bodily injury liability insurance policy it issues covering liability arising out of the ownership, maintenance, or use of a motor vehicle. Those provisions also permit the insurer and the applicant to agree to provide the coverage in an amount less than that required by subdivision (m) of Section 11580.2 of the Insurance Code but not less
than the financial responsibility requirements. Uninsured motorists coverage insures the insured, the insured’s heirs, or legal representatives for all sums within the limits established by law, that the person or persons are legally entitled to recover as damages for bodily injury, including any resulting sickness, disease, or death, to the insured from the owner or operator of an uninsured motor vehicle not owned or operated by the insured or a resident of the same household. An uninsured motor vehicle includes an underinsured motor vehicle as defined in subdivision (p) of Section 11580.2 of the Insurance Code.”
The agreement may contain additional statements not in derogation of or in conflict with this paragraph. However, it shall be presumed that an application for a policy of bodily injury liability insurance containing uninsured motorist coverage in an amount
less than that required by subdivision (m), signed by the named insured and approved by the insurer, with a policy effective date after January 1, 1985, shall be a valid agreement as to the amount of uninsured motorist coverage to be provided.
(b) As used in subdivision (a), “bodily injury” includes sickness or disease, including death, resulting therefrom; “named insured” means only the individual or organization named in the declarations of the policy of motor vehicle bodily injury liability insurance referred to in subdivision (a); as used in subdivision (a) if the named insured is an individual “insured” means the named insured and the spouse of the named insured and, while residents of the same household, relatives of either while occupants of a motor vehicle or otherwise, heirs and any other person while in or upon or entering into or
alighting from an insured motor vehicle and any person with respect to damages they are entitled to recover for care or loss of services because of bodily injury to which the policy provisions or endorsement apply; as used in subdivision (a), if the named insured is an entity other than an individual, “insured” means any person while in or upon or entering into or alighting from an insured motor vehicle and any person with respect to damages they are entitled to recover for care or loss of services because of bodily injury to which the policy provisions or endorsement apply. As used in this subdivision, “individual” shall not include persons doing business as corporations, partnerships, or associations. As used in this subdivision, “insured motor vehicle” means the motor vehicle described in the underlying insurance policy of which the uninsured motorist endorsement or coverage is a part, a
temporary substitute automobile for which liability coverage is provided in the policy or a newly acquired automobile for which liability coverage is provided in the policy if the motor vehicle is used by the named insured or with the named insured’s permission or consent, express or implied, and any other automobile not owned by or furnished for the regular use of the named insured or any resident of the same household, or by a natural person or persons for whom coverage has been deleted in accordance with subdivision (a) while being operated by the named insured or the named insured’s spouse if a resident of the same household, but “insured motor vehicle” shall not include any automobile while used as a public or livery conveyance. As used in this section, “uninsured motor vehicle” means a motor vehicle with respect to the ownership, maintenance or use of which there is no bodily injury liability
insurance or bond applicable at the time of the accident, or there is the applicable insurance or bond but the company writing the insurance or bond denies coverage thereunder or refuses to admit coverage thereunder except conditionally or with reservation, or an “underinsured motor vehicle” as defined in subdivision (p), or a motor vehicle used without the permission of the owner thereof if there is no bodily injury liability insurance or bond applicable at the time of the accident with respect to the owner or operator thereof, or the owner or operator thereof be unknown, provided that, with respect to an “uninsured motor vehicle” whose owner or operator is unknown:
(1) The bodily injury has arisen out of physical contact of the automobile with the insured or with an automobile that the insured is occupying.
(2) The insured or someone on the insured’s behalf has reported the accident within 24 hours to the police department of the city where the accident occurred or, if the accident occurred in unincorporated territory then either to the sheriff of the county where the accident occurred or to the local headquarters of the Department of the California Highway Patrol, and has filed with the insurer within 30 days thereafter a statement under oath that the insured or the insured’s legal representative has or the insured’s heirs have a cause of action arising out of the accident for damages against a person or persons whose identity is unascertainable and set forth facts in support thereof. As used in this section, “uninsured motor vehicle” shall not
include a motor vehicle owned or operated by the named insured or any resident of the same household or self-insured within the meaning of the Financial Responsibility Law financial responsibility law of the state in which the motor vehicle is registered or that is owned by the United States of America, Canada, a state or political subdivision of any of those governments or an agency of any of the foregoing, or a land motor vehicle or trailer while located for use as a residence or premises and not as a vehicle, or any equipment or vehicle designed or modified for use primarily off public roads, except while actually upon public roads.
As used in this section, “uninsured motor vehicle” also means an
insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency. An insurer’s solvency protection shall be applicable only to accidents occurring during a policy period in which its insured’s motor vehicle coverage is in effect where the liability insurer of the tortfeasor becomes insolvent within one year of the accident. In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of the coverage, the insurer making the payment, shall to the extent thereof, be entitled to any proceeds that may be recoverable from the assets of the insolvent insurer through any settlement or judgment of the person against the insolvent insurer.
Nothing in this section is intended to exclude
from the definition of an uninsured motor vehicle any motorcycle or private passenger-type four-wheel drive motor vehicle if that vehicle was subject to and failed to comply with the Financial Responsibility Law financial responsibility law of this state.
(c) The insurance coverage provided for in this section does not apply either as primary or as excess coverage:
(1) To property damage sustained by the insured.
(2) To bodily injury of the insured while in or upon or while entering into or alighting from a motor vehicle other than the described
motor vehicle if the owner thereof has insurance similar to that provided in this section.
(3) To bodily injury of the insured with respect to which the insured or the insured’s representative shall, without the written consent of the insurer, make any settlement with or prosecute to judgment any action against any person who may be legally liable therefor.
(4) In any instance where it would inure directly or indirectly to the benefit of any workers’ compensation carrier or to any person qualified as a self-insurer under any workers’ compensation law, or directly to the benefit of the United States, or any state or any political subdivision thereof.
(5) To establish proof of financial responsibility as provided in Section
16054 of the Vehicle Code.
(6) To bodily injury of the insured while occupying a motor vehicle owned by an insured or leased to an insured under a written contract for a period of six months or longer, unless the occupied vehicle is an insured motor vehicle. “Motor vehicle” as used in this paragraph means any self-propelled vehicle.
(7) To bodily injury of the insured when struck by a vehicle owned by an insured, except when the injured insured’s vehicle is being operated, or caused to be operated, by a person without the injured insured’s consent in connection with criminal activity that has been documented in a police report and that the injured insured is not a party to.
(8) To bodily injury of the insured while
occupying a motor vehicle rented or leased to the insured for public or livery purposes.
(d) Subject to paragraph (2) of subdivision (c), the policy or endorsement may provide that if the insured has insurance available to the insured under more than one uninsured motorist coverage provision, any damages shall not be deemed to exceed the higher of the applicable limits of the respective coverages, and the damages shall be prorated between the applicable coverages as the limits of each coverage bear to the total of the limits.
(e) The policy or endorsement added thereto may provide that if the insured has valid and collectible automobile medical payment insurance available to them, the damages that the insured shall be entitled to recover from the owner or operator of an uninsured motor
vehicle shall be reduced for purposes of uninsured motorist coverage by the amounts paid or due to be paid under the automobile medical payment insurance.
(f) The policy or an endorsement added thereto shall provide that the determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof, shall be made by agreement between the insured and the insurer or, in the event of disagreement, by arbitration. The arbitration shall be conducted by a single neutral arbitrator. An award or a judgment confirming an award shall not be conclusive on any party in any action or proceeding between (i) the insured, the insured’s insurer, the insured’s legal representative, or the insured’s heirs and (ii) the uninsured motorist to recover damages arising out of the accident upon which the award is based.
If the insured has or may have rights to benefits, other than nonoccupational disability benefits, under any workers’ compensation law, the arbitrator shall not proceed with the arbitration until the insured’s physical condition is stationary and ratable. In those cases in which the insured claims a permanent disability, the claims shall, unless good cause be shown, be adjudicated by award or settled by compromise and release before the arbitration may proceed. Any demand or petition for arbitration shall contain a declaration, under penalty of perjury, stating whether (i) the insured has a workers’ compensation claim; (ii) the claim has proceeded to findings and award or settlement on all issues reasonably contemplated to be determined in that claim; and (iii) if not, what reasons amounting to good cause are grounds for the arbitration to proceed immediately. The arbitration shall be deemed to be
a proceeding and the hearing before the arbitrator shall be deemed to be the trial of an issue therein for purposes of issuance of a subpoena by an attorney of a party to the arbitration under Section 1985 of the Code of Civil Procedure. Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure shall be applicable to these determinations, and all rights, remedies, obligations, liabilities liabilities, and procedures set forth in Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure shall be available to both the insured and the insurer at any time after the accident, both before and after the commencement of arbitration, if any, with the following limitations:
(1) Whenever in Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, reference is made to the court in which the action is pending, or provision is made for application to the court or obtaining leave of court or approval by the court, the court that shall have jurisdiction for the purposes of this section shall be the superior court of the State of California, in and for any county that is a proper county for the filing of a suit for bodily injury arising out of the accident, against the uninsured motorist, or any county specified in the policy or an endorsement added thereto as a proper county for arbitration or action thereon.
(2) Any proper court to which application is first made by either the insured or the insurer under Title 4 (commencing with Section
2016.010) of Part 4 of the Code of Civil Procedure for any discovery or other relief or remedy, shall thereafter be the only court to which either of the parties shall make any applications under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure with respect to the same accident, subject, however, to the right of the court to grant a change of venue after a hearing upon notice, upon any of the grounds upon which change of venue might be granted in an action filed in the superior court.
(3) A deposition pursuant to Chapter 9 (commencing with Section 2025.010) of Title 4 of Part 4 of the Code of Civil Procedure may be taken without leave of court, except that leave of court, granted with or without notice and for good cause shown, must be obtained if the notice of the taking of the deposition is served
by either party within 20 days after the accident.
(4) Subdivision (a) of Section 2025.280 of the Code of Civil Procedure is not applicable to discovery under this section.
(5) For the purposes of discovery under this section, the insured and the insurer shall each be deemed to be “a party to the action,” where that phrase is used in Section 2025.260 of the Code of Civil Procedure.
(6) Interrogatories under Chapter 13 (commencing with Section 2030.010) of Title 4 of Part 4 of the Code of Civil Procedure and requests for admission under Chapter 16 (commencing with Section 2033.010) of Title 4 of Part 4 of the Code of Civil Procedure may be served by either the insured or the insurer upon the other at any time more than 20
days after the accident without leave of court.
(7) Nothing in this section limits the rights of any party to discovery in any action pending or that may hereafter be pending in any court.
(g) The insurer paying a claim under an uninsured motorist endorsement or coverage shall be entitled to be subrogated to the rights of the insured to whom the claim was paid against any person legally liable for the injury or death to the extent that payment was made. The action may be brought within three years from the date that payment was made hereunder.
(h) An insured entitled to recovery under the uninsured motorist endorsement or coverage shall be reimbursed within the conditions stated herein without being required to sign any
release or waiver of rights to which they may be entitled under any other insurance coverage applicable; nor shall payment under this section to the insured be delayed or made contingent upon the decisions as to liability or distribution of loss costs under other bodily injury liability insurance or any bond applicable to the accident. Any loss payable under the terms of the uninsured motorist endorsement or coverage to or for any person may be reduced:
(1) By the amount paid and the present value of all amounts payable to them, their executor, administrator, heirs, or legal representative under any workers’ compensation law, exclusive of nonoccupational disability benefits.
(2) By the amount the insured is entitled to recover from any other person insured under the underlying
liability insurance policy of which the uninsured motorist endorsement or coverage is a part, including any amounts tendered to the insured as advance payment on behalf of the other person by the insurer providing the underlying liability insurance.
(i) (1) No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within two years from the date of the accident:
(A) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction.
(B) Agreement as to the amount due under the policy has been concluded.
(C) The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested. Notice shall be sent to the insurer or to the agent for process designated by the insurer filed with the department.
(2) Any arbitration instituted pursuant to this section shall be concluded either:
(A) Within five years from the institution of the arbitration proceeding.
(B) If the insured has a workers’ compensation claim arising from the same accident, within three years of the date the claim is concluded, or within the five-year period set forth in subparagraph (A), whichever occurs later.
(3) The doctrines of estoppel, waiver, impossibility, impracticality, and futility apply to excuse a party’s noncompliance with the statutory timeframe, as determined by the court.
(4) Parties to the insurance contract may stipulate in writing to extending the time to conclude arbitration.
(j) Notwithstanding subdivisions (b) and (i), in the event the accident occurs in any other state or foreign jurisdiction to which coverage is extended under the policy and the insurer of the tortfeasor becomes insolvent, any action authorized pursuant to this section may be maintained within three months of the insolvency of the tortfeasor’s insurer, but in no event later than the pertinent period of limitation of the jurisdiction in which the accident occurred.
(k) Notwithstanding subdivision (i), any insurer whose insured has made a claim under the insured’s uninsured motorist coverage, and the claim is pending, shall, at least 30 days before the expiration of the applicable statute of limitation, notify its insured in writing of the statute of limitation applicable to the injury or death. Failure of the insurer to provide the written notice shall operate to toll any applicable statute of limitation or other time limitation for a period of 30 days from the date the written notice is actually given. The notice shall not be required if the insurer has received notice that the insured is represented by an attorney.
(l) As used in subdivision (b), “public or livery conveyance,” or terms of similar import, shall not include the operation or
use of a motor vehicle by the named insured in the performance of volunteer services for a nonprofit charitable organization or governmental agency by providing social service transportation as defined in subdivision (f) of Section 11580.1. This subdivision shall apply only to policies of insurance issued, amended, or renewed on or after January 1, 1976.
(m) Coverage provided under an uninsured motorist endorsement or coverage shall be offered with coverage limits equal to the limits of liability for bodily injury in the underlying policy of insurance, but shall not be required to be offered with limits in excess of the following amounts:
(1) A limit of thirty thousand dollars ($30,000) because of bodily injury to or death of one person in any one accident.
(2) Subject to the limit for one person set forth in paragraph (1), a limit of sixty thousand dollars ($60,000) because of bodily injury to or death of two or more persons in any one accident.
(n) Underinsured motorist coverage shall be offered with limits equal to the limits of liability for the insured’s uninsured motorist limits in the underlying policy, and may be offered with limits in excess of the uninsured motorist coverage. For the purposes of this section, uninsured and underinsured motorist coverage shall be offered as a single coverage. However, an insurer may offer coverage for damages for bodily injury or wrongful death from the owner or operator of an underinsured motor vehicle at greater limits than an uninsured motor vehicle.
(o) If an insured has failed to provide an insurer with wage loss information or medical treatment record releases within 15 days of the insurer’s request or has failed to submit to a medical examination arranged by the insurer within 20 days of the insurer’s request, the insurer may, at any time prior to 30 days before the actual arbitration proceedings commence, request, and the insured shall furnish, wage loss information or medical treatment record releases, and the insurer may require the insured, except during periods of hospitalization, to make themselves available for a medical examination. The wage loss information or medical treatment record releases shall be submitted by the insured within 10 days of request and the medical examination shall be arranged by the insurer no sooner than 10 days after request, unless the insured agrees to an earlier examination date, and not later than 20
days after the request. If the insured fails to comply with the requirements of this subdivision, the actual arbitration proceedings shall be stayed for at least 30 days following compliance by the insured. The proceedings shall be scheduled as soon as practicable following expiration of the 30-day period.
(p) This subdivision applies only when bodily injury, as defined in subdivision (b), is caused by an underinsured motor vehicle. If the provisions of this subdivision conflict with subdivisions (a) through (o), the provisions of this subdivision shall prevail.
(1) As used in this subdivision, “an insured motor vehicle” is one that is insured under a motor vehicle liability policy, or automobile liability insurance policy, self-insured, or for which a cash deposit or bond has been
posted to satisfy a financial responsibility law.
(2) “Underinsured motor vehicle” means a motor vehicle that is an insured motor vehicle but insured for an amount that is less than the uninsured motorist limits carried on the motor vehicle of the injured person.
(3) This coverage does not apply to any bodily injury until the limits of bodily injury liability policies applicable to all insured motor vehicles causing the injury have been exhausted by payment of judgments or settlements, and proof of the payment is submitted to the insurer providing the underinsured motorist coverage.
(4) When bodily injury is caused by one or more motor vehicles, whether insured, underinsured, or uninsured, the maximum liability of
the insurer providing the underinsured motorist coverage shall not exceed the insured’s underinsured motorist coverage limits, less the amount paid to the insured by or for any person or organization that may be held legally liable for the injury.
(5) The insurer paying a claim under this subdivision shall, to the extent of the payment, be entitled to reimbursement or credit in the amount received by the insured from the owner or operator of the underinsured motor vehicle or the insurer of the owner or operator.
(6) If the insured brings an action against the owner or operator of an underinsured motor vehicle, they shall forthwith give to the insurer providing the underinsured motorist coverage a copy of the complaint by personal service or certified mail. All pleadings
and depositions shall be made available for copying or copies furnished the insurer, at the insurer’s expense, within a reasonable time.
(7) Underinsured motorist coverage shall be included in all policies of bodily injury liability insurance providing uninsured motorist coverage issued or renewed on or after July 1, 1985. Notwithstanding this section, an agreement to delete uninsured motorist coverage completely, or with respect to a person or persons designated by name, executed prior to July 1, 1985, shall remain in full force and effect.
(q) Regardless of the number of vehicles involved, whether insured or not, persons covered, claims made, premiums paid, or the number of premiums shown on the policy, in no event shall the limit of liability for two or more motor
vehicles or two or more policies be added together, combined, or stacked to determine the limit of insurance coverage available to injured persons.
(r) (1) The commissioner shall undertake a study to determine the impact on rate, policy cost, and consumer take up of uninsured motorist and underinsured motorist policies in each both of the following situations:
(A) The underinsured motorist coverage provisions in this section were amended to define an “underinsured motor vehicle” to mean “an insured motor vehicle that has liability coverage less than the total damages suffered by the injured
person or persons” using best available data of actual damages suffered by accident victims in California.
(B) The underinsured motorists provisions in this section were amended to eliminate the reimbursement or credit given to the insurer paying the underinsured motorist recovery to account for payment made by the at-fault driver or their insurer pursuant to paragraphs (4) and (5) of subdivision (p).
(C)The elimination of subdivision (q), known as the “anti-stacking”
provision, using best available data of the number of vehicles registered to the number of policies, the number of vehicles involved in accidents, and their limits.
(2) The commissioner shall also undertake a study to determine each of the following:
(B)What impact a written disclosure explaining the purpose of uninsured and underinsured motorist coverage and the cost of carrying uninsured and underinsured motorist coverage at a level equal to their liability coverage would have on consumers who currently carry uninsured motorist and underinsured motorist coverage with limits less than their liability coverage.
(3) The commissioner shall report their findings to the committees of the Legislature having jurisdiction over the business of insurance by December 31,
2023.
SEC. 2.
Section 12960 is added to the Insurance Code, to read:12960.
The commissioner shall, by February 1, 2023, distribute a bulletin soliciting rate applications from insurers to account for the change to the financial responsibility law in Division 7 (commencing with Section 16000) of the Vehicle Code that will go into operation on January 1, 2025, and require the applications to be submitted by July 1, 2023. A rate change shall only go into effect on or after January 1, 2025, the operative date of the change in the financial responsibility law.SEC. 3.
Section 16056 of the Vehicle Code is amended to read:16056.
(a) No policy or bond shall be effective under Section 16054 unless issued by an insurance company or surety company admitted to do business in this state by the Insurance Commissioner, except as provided in subdivision (b) of this section, nor unless the policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than fifteen thousand dollars ($15,000) because of bodily injury to or death of one person in any one accident and, subject to that limit for one person, to a limit of not less than thirty thousand dollars ($30,000) because of bodily injury to or death of two or more persons in any one accident, and, if the accident has resulted in injury to, or destruction of property, to a limit of not less than five thousand dollars ($5,000) because of injury to or destruction of property of others in any one accident.(b) No policy or bond shall be effective under Section 16054 with respect to any vehicle which was not registered in this state or was a vehicle which was registered elsewhere than in this state at the effective date of the policy or bond or the most recent renewal thereof, unless the insurance company or surety company issuing the policy or bond is admitted to do business in this state, or if the company is not admitted to do business in this state, unless it executes a power of attorney authorizing the department to accept service on its behalf of notice or process in any action upon the policy or bond arising out of an accident mentioned in subdivision (a).
(c) Any nonresident driver whose driving privilege has been suspended or revoked based upon an action that requires proof of financial responsibility may, in lieu of providing a certificate of insurance from a company admitted to do business in California, provide a written certificate of proof of financial responsibility that is satisfactory to the department, covers the operation of a vehicle in this state, meets the liability requirements of this section, and is from a company that is admitted to do business in that person’s state of residence.
(d) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
SEC. 4.
Section 16056 is added to the Vehicle Code, to read:16056.
(a) No policy or bond shall be effective under Section 16054 unless issued by an insurance company or surety company admitted to do business in this state by the Insurance Commissioner, except as provided in subdivision (b), nor unless the policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than thirty thousand dollars ($30,000) because of bodily injury to or death of one person in any one accident and, subject to that limit for one person, to a limit of not less than sixty thousand dollars ($60,000) because of bodily injury to or death of two or more persons in any one accident, and, if the accident has resulted in injury to, or destruction of property, to a limit of not less than fifteen thousand dollars ($15,000) because of injury to or destruction of(b) No policy or bond shall be effective under Section 16054 with respect to any vehicle that was not registered in this state or was a vehicle that was registered elsewhere than in this state at the effective date of the policy or bond or the most recent renewal thereof, unless the insurance company or surety company issuing the policy or bond is admitted to do business in this state, or if the company is not admitted to do business in this state, unless it executes a power of attorney authorizing the
department to accept service on its behalf of notice or process in any action upon the policy or bond arising out of an accident mentioned in subdivision (a).
(c) Any nonresident driver whose driving privilege has been suspended or revoked based upon an action that requires proof of financial responsibility may, in lieu of providing a certificate of insurance from a company admitted to do business in California, provide a written certificate of proof of financial responsibility that is satisfactory to the department, covers the operation of a vehicle in this state, meets the liability requirements of this section, and is from a company that is admitted to do business in that person’s state of residence.
(d) On January 1, 2035, and on January 1, 2045, the minimum liability
coverage shall be increased by ten thousand dollars ($10,000) for bodily injury or death for one person, by twenty thousand dollars ($20,000) for bodily injury or death for all persons, and by five thousand dollars ($5,000) for property damage.
(e) This section shall become operative on January 1, 2025.
SEC. 5.
Section 16430 of the Vehicle Code is amended to read:16430.
(a) “Proof of financial responsibility,” when required by this code, means proof of financial responsibility resulting from the ownership or operation of a motor vehicle and arising by reason of personal injury to, or death of, any one person, of at least fifteen thousand dollars ($15,000) and, subject to the limit of fifteen thousand dollars ($15,000) for each person injured or killed, of at least thirty thousand dollars ($30,000) for the injury to, or the death of, two or more persons in any one accident, and for damages to property in excess of one thousand dollars ($1,000), of at least five thousand dollars ($5,000) resulting from any one accident. Proof of financial responsibility may be given in any manner authorized in this chapter.(b) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
SEC. 6.
Section 16430 is added to the Vehicle Code, to read:16430.
(a) “Proof of financial responsibility,” when required by this code, means proof of financial responsibility resulting from the ownership or operation of a motor vehicle and arising by reason of personal injury to, or death of, any one person, of at least thirty thousand(b) (1) On January 1, 2035, and January 1, 2045, the minimum liability coverage shall be increased by ten thousand dollars ($10,000) for bodily injury or death for each person, by twenty thousand dollars ($20,000) for bodily injury or death for all persons, and by five thousand dollars ($5,000) for property damage.
(2) The Insurance Commissioner shall solicit rate submissions to effectuate the January 1, 2035, increase and the January 1, 2045, increase, to be submitted by July 1, 2033, and July 1, 2043, respectively, and shall process and approve them
consistent with the manner outlined in Section 12960 of the Insurance Code.
(c) This section shall become operative on January 1, 2025.
SEC. 7.
Section 16435 of the Vehicle Code is amended to read:16435.
(a) Proof of financial responsibility may be given by the deposit of thirty-five thousand dollars ($35,000), as provided in Section 16054.2. The department shall not accept a deposit where any judgment theretofore obtained against that person as a result of damages arising from the operation of any motor vehicle shall not have been paid in full.(b) This section shall remain in effect until January 1, 2025, and as of that date is repealed.
SEC. 8.
Section 16435 is added to the Vehicle Code, to read:16435.
(a) Proof of financial responsibility may be given by the deposit of seventy-five thousand dollars ($75,000) as provided in Section 16054.2. The department shall not accept a deposit where any judgment theretofore obtained against that person as a result of damages arising from the operation of any motor vehicle shall not have been paid in full.(b) The deposit requirement in subdivision (a) shall be increased by twenty-five thousand dollars ($25,000) on January 1, 2035, and on January 1, 2045.
(c) This section shall become operative on January 1, 2025.
SEC. 9.
Section 16451 of the Vehicle Code is amended to read:16451.
(a) An owner’s policy of motor vehicle liability insurance shall insure the named insured and any other person using any motor vehicle registered to the named insured with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of ownership, maintenance, or use of the motor vehicle within the continental limits of the United States to the extent and aggregate amount, exclusive of interest and costs, with respect to each motor vehicle, of fifteen thousand dollars ($15,000) for bodily injury to or death of each person as a result of any one accident, and, subject to the limit as to one person, the amount of thirty thousand dollars ($30,000) for bodily injury to or death of all persons as a result of any one accident and the amount of five thousand dollars ($5,000) for damage to property of others as a result of any one accident.(b) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
SEC. 10.
Section 16451 is added to the Vehicle Code, to read:16451.
(a) An owner’s policy of motor vehicle liability insurance shall insure the named insured and any other person using any motor vehicle registered to the named insured with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of ownership, maintenance, or use of the motor vehicle within the continental limits of the United States to the extent and aggregate amount, exclusive of interest and costs, with respect to each motor vehicle, of thirty thousand dollars ($30,000) for bodily injury to or death of each person as a result of any one accident, and, subject to the limit as to one person, the amount of sixty thousand dollars ($60,000) for bodily injury to or death of all persons as a result of any one accident and the amount of fifteen thousand dollars ($15,000) for damage to property of others as a result of any one accident.(b) On January 1, 2035, and January 1, 2045, the minimum liability coverage shall be increased by ten thousand dollars ($10,000) for bodily injury or death for one person, by twenty thousand dollars ($20,000) for bodily injury or death for all persons, and by five thousand dollars ($5,000) for property damage.
(c) This section shall become operative on January 1, 2025.
SEC. 11.
Section 16500 of the Vehicle Code is amended to read:16500.
(a) Every owner of a vehicle used in the transportation of passengers for hire, including taxicabs, when the operation of the vehicle is not subject to regulation by the Public Utilities Commission, shall maintain, whenever the owner may be engaged in conducting those operations, proof of financial responsibility resulting from the ownership or operation of the vehicle and arising by reason of personal injury to, or death of, any one person, of at least fifteen thousand dollars ($15,000), and, subject to the limit of fifteen thousand dollars ($15,000) for each person injured or killed, of at least thirty thousand dollars ($30,000) for the injury to, or the death of, two or more persons in any one accident, and for damages to property of at least five thousand dollars ($5,000) resulting from any one accident. Proof of financial responsibility may be maintained by either:(1) Being insured under a motor vehicle liability policy against that liability.
(2) Obtaining a bond of the same kind, and containing the same provisions, as those bonds specified in Section 16434.
(3) By depositing with the department thirty-five thousand dollars ($35,000), which amount shall be deposited in a special deposit account with the Controller for the purpose of this section.
(4) Qualifying as a self-insurer under Section 16053.
(b) The department shall return the deposit to the person entitled thereto when they are no longer required to maintain proof of financial responsibility as required by this section or upon
their death.
(c) This section shall remain in effect until January 1, 2025, and as of that date is repealed.
SEC. 12.
Section 16500 is added to the Vehicle Code, to read:16500.
(a) (1) Every owner of a vehicle used in the transportation of passengers for hire, including taxicabs, when the operation of the vehicle is not subject to regulation by the Public Utilities Commission, shall maintain, whenever the owner may be engaged in conducting those operations, proof of financial responsibility resulting from the ownership or operation of the vehicle and arising by reason of personal injury to, or death of, any one person, of at least thirty thousand dollars ($30,000), and, subject to the limit of thirty thousand dollars ($30,000) for each person injured or killed, of at least sixty thousand dollars ($60,000) for the injury to, or the death of, two or more persons in any one accident, and for damages to property of at least fifteen thousand dollars ($15,000) resulting from any one accident.(2) Proof of financial responsibility may be maintained by any of the following:
(A) Being insured under a motor vehicle liability policy against that liability.
(B) Obtaining a bond of the same kind, and containing the same provisions, as those bonds specified in Section 16434.
(C) By depositing with the department seventy-five thousand dollars ($75,000), which shall be deposited in a special deposit account with the Controller for the purpose of this section.
(D) Qualifying as a self-insurer
under Section 16053.
(b) The department shall return the deposit to the person entitled thereto when the person is no longer required to maintain proof of financial responsibility as required by this section or upon the person’s death.
(c) On January 1, 2035, and January 1, 2045, each of the following shall occur:
(1) The minimum liability coverage shall be increased by ten thousand dollars ($10,000) for bodily injury or death for one person, by twenty thousand dollars ($20,000) for bodily injury or death for all persons, and by five thousand dollars ($5,000) for property damage.
(2) The deposit requirement in subparagraph (C) of paragraph (2) of
subdivision (a) shall be increased by twenty-five thousand dollars ($25,000).
(d) This section shall become operative on January 1, 2025.
