SF 2346 (LSB 5549SV (2) 83)

SENATE FILE 2346

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SSB 3102)

A BILL FOR

An Act relating to certain coverage provisions contained in uninsured and underinsured motor vehicle insurance coverage.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 516A.2, subsection 3, Code 2009, is amended by striking the subsection and inserting in lieu thereof the following:
   3.  A policy to which this chapter applies shall not include any type of step-down provision or exclusion that operates to reduce or eliminate uninsured or underinsured motor vehicle coverage for the reason that the person is injured due to the fault of a relative who is a household member insured under the policy, unless the insurer also makes available a policy with limits of uninsured or underinsured motor vehicle coverage that are not subject to a step-down provision or exclusion as described above. An insurer shall provide notice directly to the named insured under a policy containing such a step-down provision or exclusion that the policy contains no coverage or reduced coverage for injuries if a person is injured due to the fault of a relative who is a household member insured under the policy, and informing the insured that coverage is available which is not subject to such a step-down provision or exclusion. Such notice shall be provided to the insured at the time of issuance of the policy and at least annually thereafter.
    Sec. 2.  Section 516A.2, Code 2009, is amended by adding the following new subsections:
   NEW SUBSECTION.  4.  An insurer providing uninsured and underinsured motor vehicle coverage shall make available the same limits of coverage that the insurer offers for bodily injury liability coverage. However, the purchaser of the uninsured and underinsured motor vehicle coverage is not required to purchase those same limits of coverage.
   NEW SUBSECTION.  5.  This chapter shall not be construed to prohibit an insurer from including in the policy an antistacking provision based on multiple policies or multiple vehicles, or both. If multiple policies are applicable to an injured person, the injured person shall be entitled to recover pursuant to the terms of the policies, but the available amount of coverage shall not be less than the single highest limit of any of the applicable policies.
EXPLANATION
   This bill relates to uninsured and underinsured motor vehicle insurance coverage.
   Code section 516A.2 is amended to prohibit step-down provisions or exclusions in motor vehicle insurance policies that operate to reduce uninsured or underinsured motor vehicle coverage because a person is injured by, or while occupying a vehicle being operated by, a relative as defined in Code section 523I.102 or household member insured under the policy unless the insurer makes available a policy that is not subject to such a step-down provision or exclusion. An insurer is required to notify the insured about the effect of the step-down provision or exclusion and about the availability of coverage without the step-down provision or exclusion.
   The bill also requires an insurer providing uninsured and underinsured motor vehicle coverage to make available the same limits of coverage that the insurer offers for bodily injury liability coverage. The purchaser of such coverage, however, is not required to purchase those same limits of coverage.
   The bill also provides that Code chapter 516A shall not be construed to prohibit an insurer from including in a policy an antistacking provision based on multiple policies or vehicles, or both. If multiple policies are applicable to an injured person, the injured person is entitled to recover pursuant to the terms of the policies but the available amount of coverage shall not be less than the single highest limit of any of the applicable policies.