STAND. COM. REP. NO. 785

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 58

       S.D. 2

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Madam:

 

     Your Committee on Judiciary and Government Operations, to which was referred S.B. No. 58, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO MOTOR VEHICLE INSURANCE,"

 

begs leave to report as follows:

 

     The purpose of this measure is to allow automobile insurers to exclude specified household members from coverage under an automobile insurance policy. 

 

     Your Committee finds that broad motor vehicle insurance coverage is generally consistent with public policy.  The Hawaii Supreme Court has construed Hawaii law to the effect that a relative of a named insured, even if temporarily absent and living elsewhere, is nevertheless a resident of the named insured's household and therefore is covered under the named insured's policy.  See Mikelson v. United Services Automobile Ass'n, 107 Hawai'i 192, 111 P.3d 601 (2005).  This broad interpretation of coverage may from time to time result in severe hardship to certain consumers.  Under this broad interpretation of coverage, it is possible that an insured with a good driving record may be unable to find affordable insurance coverage, if the insured resides with a relative who has an extensive history of serious moving violations or costly insurance claims.

 

     Your Committee has amended this measure by:

 

(1)  Adding to the prescribed endorsement language, a section to require the signed acknowledgement of the excluded driver;

 

(2)  Making the excluded driver eligible for an assigned claim in the event of an accident;

 

(3)  Prohibiting an excluded person from operating a motor vehicle and providing penalties;

 

(4)  Prohibiting the insured driver from permitting an excluded person to drive the insured vehicle and providing penalties;

 

(5)  Excluding from assigned claims a named insured who has rejected in writing the offer of uninsured motorist coverage;

 

(6)  Deleting reference to non-applicability to commercial vehicles; and

 

(7)  Changing the effective date to July 1, 2050 to continue discussions in this matter and repealing this measure on an unspecified future date.

 

     As affirmed by the record of votes of the members of your Committee on Judiciary and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 58, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 58, S.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Judiciary and Government Operations,

 

		____________________________ BRIAN T. TANIGUCHI, Chair