PART III. 
COVERAGES AND RIGHTS



 



Cross References



 



  Arbitration; binding arbitration, see §§431:10C-213 and
213.5.



 



Law Journals and Reviews



 



  Tort and Insurance "Reform" in a Common Law Court.  14 UH L. Rev. 55.



 



§431:10C-301  Required motor vehicle policy
coverage.  (a)  An insurance policy covering a motor vehicle shall provide:



(1)  Coverage specified in section 431:10C-304; and



(2)  Insurance to pay on behalf of the owner or any
operator of the insured motor vehicle using the motor vehicle with a reasonable
belief that the person is entitled to operate the motor vehicle, sums which the
owner or operator may legally be obligated to pay for injury, death, or damage
to property of others, except property owned by, being transported by, or in
the charge of the insured, which arise out of the ownership, operation,
maintenance, or use of the motor vehicle; provided that in the case of a
U-drive motor vehicle, insurance to pay on behalf of the renter or any operator
of the insured motor vehicle using the motor vehicle with the express
permission of the renter or lessee, sums which the renter or operator may be
legally obligated to pay for damage or destruction of property of others
(except property owned by, being transported by, or in the charge of the renter
or operator) arising out of the operation or use of the motor vehicle unless
the motor vehicle is reported stolen by the owner within three days of
notification of the incident; provided that the insurer and owner of a U-drive
vehicle shall have the right of subrogation against the renter and operator for
breach of the rental contract between owner and renter; and provided further
that, in the event that any motor vehicle offered for rental or lease is
involved in an accident, the lessor shall provide all information it has or
obtains relevant to the accident to all other involved parties upon their
request, including but not limited to information about the lessee, and the
driver of the vehicle if other than the lessee.



(b)  A motor vehicle insurance policy shall
include:



(1)  Liability coverage of not less than $20,000 per
person, with an aggregate limit of $40,000 per accident, for all damages
arising out of accidental harm sustained as a result of any one accident and
arising out of ownership, maintenance, use, loading, or unloading of a motor
vehicle;



(2)  Liability coverage of not less than $10,000 for
all damages arising out of damage to or destruction of property including motor
vehicles and including the loss of use thereof, but not including property
owned by, being transported by, or in the charge of the insured, as a result of
any one accident arising out of ownership, maintenance, use, loading, or
unloading, of the insured vehicle;



(3)  With respect to any motor vehicle registered or
principally garaged in this State, liability coverage provided therein or
supplemental thereto, in limits for bodily injury or death set forth in
paragraph (1), under provisions filed with and approved by the commissioner,
for the protection of persons insured thereunder who are legally entitled to
recover damages from owners or operators of uninsured motor vehicles because of
bodily injury, sickness, or disease, including death, resulting therefrom;
provided that the coverage required under this paragraph shall not be
applicable where any named insured in the policy shall reject the coverage in
writing; and



(4)  Coverage for loss resulting from bodily injury or
death suffered by any person legally entitled to recover damages from owners or
operators of underinsured motor vehicles.  An insurer may offer the
underinsured motorist coverage required by this paragraph in the same manner as
uninsured motorist coverage; provided that the offer of both shall:



(A)  Be conspicuously displayed so as to be
readily noticeable by the insured;



(B)  Set forth the premium for the coverage
adjacent to the offer in a manner that the premium is clearly identifiable with
the offer and may be easily subtracted from the total premium to determine the
premium payment due in the event the insured elects not to purchase the option;
and



(C)  Provide for written rejection of the
coverage by requiring the insured to affix the insured's signature in a
location adjacent to or directly below the offer.



(c)  The stacking or aggregating of uninsured motorist
coverage or underinsured motorist coverage is prohibited, except as provided in
subsection (d).



(d)  An insurer shall offer the insured the
opportunity to purchase uninsured motorist coverage and underinsured motorist
coverage by offering the following options with each motor vehicle insurance
policy:



(1)  The option to stack uninsured motorist coverage
and underinsured motorist coverage; and



(2)  The option to select uninsured motorist coverage
and underinsured motorist coverage, whichever is applicable, up to but not
greater than the bodily injury liability coverage limits in the insured's
policy.



These offers are to be made when a motor
vehicle insurance policy is first applied for or issued.  For any existing
policies, an insurer shall offer such coverage at the first renewal after
January 1, 1993.  Once an insured has been provided the opportunity to purchase
or reject the coverages in writing under the options, no further offer is
required to be included with any renewal or replacement policy issued to the
insured.



(e)  If uninsured motorist coverage or
underinsured motorist coverage is rejected, pursuant to section 431:10C-301(b):



(1)  The offers required by section 431:10C-301(d) are
not required to be made;



(2)  No further offers or notice of the availability
of uninsured motorist coverage and underinsured motorist coverage are required
to be made in connection with any renewal or replacement policy; and



(3)  The written rejections required by section
431:10C-301(b) shall be presumptive evidence of the insured's decision to
reject the options. [L 1987, c 347, pt of §2; am L 1988, c 306, §1; am L 1992,
c 123, §4, c 124, §9, and c 221, §1; am L 1993, c 205, §26; am L Sp 1993, c 4,
§5; am L 1997, c 251, §38; am L 1998, c 275, §16]



 



Law Journals and Reviews



 



  Nobody I Know Should Have $35,000 B.I. Limits.  23 HBJ 89.



 



Case Notes



 



  Discussed, where insurer not legally obligated to pay
uninsured motorist benefits claimed where accident occurred in Thailand, a country outside of motor vehicle insurance policy's territorial limit.  134 F.
Supp. 2d 1159.



  Pursuant to subsection (b)(3), insurance coverage for
uninsured motorists is "optional coverage".  76 H. 304, 875 P.2d 921.



  Underinsured motorist coverage was subject to stacking.  77
H. 362, 884 P.2d 1138.



  Defendant was not a permissive user of insured vehicle and
was therefore not a "covered person" under insurance contract.  78 H.
249, 891 P.2d 1041.



  Named insured under an automobile liability insurance policy,
who is injured by hit-and-run driver, can be entitled to uninsured motorist
benefits thereunder when the named insured is operating a motorcycle at the
time of the named insured's accident.  78 H. 325, 893 P.2d 176.



  Car rental agreement not contract for insurance and not
source of customer's entitlement to insurance coverage; customer statutorily
entitled to minimum motor vehicle insurance coverage required by this section. 
82 H. 351, 922 P.2d 964.



  Car rental company, as self-insurer, not subject to
subsection (b)(3) and (4); thus, not required to provide uninsured or
underinsured motorist coverage to permissive users of its vehicles.  82 H. 466,
923 P.2d 408.



  Mandatory uninsured motorist offer requirements of subsection
(b)(3) apply to the minimum requirements of a "no-fault policy" as
specified in subsection (a).  82 H. 466, 923 P.2d 408.



  Insurer's offer to stack benefits legally insufficient where
offer did not clearly convey that insureds could have obtained same amount of
coverage at lower premium by selecting stacking option and failed to inform
insureds that stacking was available for a relatively modest increase in
premium.  87 H. 307, 955 P.2d 100.



  Section requires that insurer obtain written rejection of
stacked coverage; insurer's offer of coverage inconsistent with requirement as
offer required insured to affirmatively select, rather than affirmatively
reject, stacking option.  87 H. 307, 955 P.2d 100.



  Though insurer was required under this section to offer
stacking option at time of renewal of policy, insurer's failure to do so was
irrelevant where policy was not in effect at time of accident.  87 H. 307, 955
P.2d 100.



  An underinsured motorist carrier's grounds for denying
underinsured motorist benefits under a consent-to-settle provision in an
underinsured motorist policy must be reasonable, in good faith, and within the
bounds of the intent underlying subsection (b)(4).  90 H. 302, 978 P.2d 740.



  Exhaustion clauses in underinsured motorist policies
requiring insured to exhaust tortfeasor's insurance prior to applying for
underinsured motorist benefits are void as against public policy.  90 H. 302,
978 P.2d 740.



  It is unreasonable for an underinsured motorist insurance
carrier to precondition its refusal to consent to settle upon the failure of
the insured to achieve a settlement exhausting the tortfeasor's policy limits. 
90 H. 302, 978 P.2d 740.



  When an insured makes a material change to an existing policy
after a valid rejection of coverage, the resulting policy is not a renewal or
replacement policy within the meaning of subsection (d), and a new offer of
coverage is required; whether a material change was made is a fact specific
determination based on the totality of the circumstances that includes
consideration of the public policies underlying Hawaii's motor vehicle
insurance code.  93 H. 210, 998 P.2d 490.



  Trial court correctly ruled that insured was not entitled to
uninsured motorist benefits where insured's injuries resulting from being shot
from an adjacent parked car did not arise from the operation, maintenance, or
use of a motor vehicle.  103 H. 263, 81 P.3d 1178.



  Insurer's refusal to consent to settle in order to protect
its subrogation rights, in light of its investigation of factors that would
render subrogation more or less favorable to insurer, was reasonable; however,
having withheld its consent, insurer had to put itself in the position of
insured's subrogee by paying insured the amount of the settlement offer.  111
H. 160, 140 P.3d 393.



  Under the Hawaii motor vehicle insurance statutory scheme, no
requirement exists that an injured party exhaust the liability policies of all
joint tortfeasors before making a claim against his or her uninsured motorist
policy.  88 H. 77 (App.), 961 P.2d 1171.



  Denial of coverage did not violate subsection (b)(4) where
policy did not provide coverage for non-named insureds who are injured while
not occupying a covered automobile but clearly provided UIM coverage to persons
who are injured while occupying a covered automobile.  88 H. 122 (App.), 962
P.2d 1004.



  Where injured employee was a permissive user of the company
vehicle of the named insured, was using the truck during the course of
employee's employment to get to and from the jobsite where employee was injured
and to store and transport the equipment that employee was using as part of
employee's duties at the time employee was injured, employee demonstrated
"some connection with the insured vehicle", and was thus an insured
person who was entitled to uninsured motorist coverage.  118 H. 123 (App.), 185
P.3d 871.



  Construing the language of §431:10C-103 and this section
governing uninsured motorist (UM) and underinsured motorist (UIM) insurance
according to their plain and commonly understood meaning and in pari materia
with §§663-10.9 and 663-11, UM and UIM policies must provide coverage for all
damages which an insured is legally entitled to recover from the owner or
operator of an uninsured or underinsured motor vehicle, which necessarily
encompasses damages for which the owner or operator of an uninsured or
underinsured motor vehicle is jointly and severally liable pursuant to
§§663-10.9 and 663-11.  120 H. 329 (App.), 205 P.3d 594.



  To obtain underinsured motorist (UIM) coverage in Hawaii, the
liability for damages must exceed the total amount of bodily injury liability
limits applicable at the time of the loss and the policy limits for uninsured
motorist coverage and payments or settlements are not part of that analysis;
thus, trial court correctly determined that the joint and several "damages
imposed by law" against the driver exceeded the cumulative limits of
driver's bodily injury policies, driver met the statutory definition of an UIM,
and the insurer therefore was obligated to pay victim UIM benefits to
compensate victim for the difference.  120 H. 329 (App.), 205 P.3d 594.



  Where the "other insurance" clause contained in
insurer's policy created a priority of coverage among multiple insurers, and
did not limit or reduce insurer's liability for uninsured motorist payments to
insured, the provision was valid and enforceable under Hawaii law, and the
circuit court did not err in denying insured's motion for partial summary
judgment.  120 H. 329 (App.), 205 P.3d 594.



  Discussed:  77 H. 117, 883 P.2d 38; 86 H. 511, 950 P.2d 695.



  Mentioned:  807 F. Supp. 98.