PA 09-72—sSB 895
Insurance and Real Estate Committee
AN ACT CONCERNING NOTIFICATION OF UNDERINSURED MOTORIST CONVERSION COVERAGE AND THE RECOVERY OF COLLISION DEDUCTIBLE IN A SUBROGATION ACTION
SUMMARY: This act requires an auto insurer issuing a new automobile liability insurance policy to disclose to an insured at the time of sale or issuance the availability of, premium for, and description of underinsured motorist conversion coverage. The description must be made in a conspicuous manner with the legally required informed consent form regarding uninsured and underinsured motorist coverage.
Under the act, an auto insurer that subrogates a claim must (1) seek to recover any collision deductible the insured paid, unless the insured requests that it not be included in the subrogation demand, and (2) share subrogation recoveries with the insured on a proportionate basis. By law, an insurer providing underinsured motorist coverage cannot subrogate against the owner or operator of the underinsured motor vehicle for underinsured motorist benefits paid or payable by the insurer.
EFFECTIVE DATE: January 1, 2010
Minimum Coverage Required
The law requires each auto insurer to provide uninsured and underinsured motorist coverage with bodily injury and death limits equal to the liability limits the insured purchased, unless the insured (1) requests a lesser amount (but not below the legal limit) in writing and (2) signs an informed consent form. A person must purchase coverage of at least $20,000 (for injury or death of one person) and $40,000 (for more than one person in an accident).
Must Offer Coverage
By law, each auto insurer must offer, for an additional premium, underinsured motorist conversion coverage. If purchased, an insurer cannot reduce the insured's underinsured motorist coverage limit by amounts received from a tortfeasor or third-party on the insured's behalf.
Subrogation is the principle that gives an insurer who pays a claim the insured's rights and remedies against a third party with respect to that claim. Thus, if an insurer pays a claim for which another was liable, the insurer may seek payment from the liable party.
OLR Tracking: JLK: KM: PF: TS