02-18 10:01 H.B. 522
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Automotive Repair Business Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Colin W. Jack
Senate Sponsor:
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LONG TITLE
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General Description:
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This bill amends provisions related to automotive repairs.
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Highlighted Provisions:
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This bill:
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▸ requires that a motor vehicle liability coverage policy include coverage of the difference
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in market value from before and after a motor vehicle accident;
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▸ grants the Insurance Department rulemaking authority to establish a formula to determine
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the coverage of the difference in market value from before and after a motor vehicle
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accident;
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▸ requires that an automotive repair facility or installer use crash parts that are substantially
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equivalent to Original Equipment Manufacturer aftermarket crash parts; and
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▸ makes technical and conforming changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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AMENDS:
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31A-22-303, as last amended by Laws of Utah 2023, Chapter 415
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31A-22-319, as renumbered and amended by Laws of Utah 1995, Chapter 8
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 31A-22-303 is amended to read:
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31A-22-303 . Motor vehicle liability coverage.
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(1)(a) In addition to complying with the requirements of Chapter 21, Insurance
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Contracts in General, and Part 2, Liability Insurance in General, a policy of motor
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vehicle liability coverage under Subsection 31A-22-302(1)(a) shall:
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(i) name the motor vehicle owner or operator in whose name the policy was
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purchased, state that named insured's address, the coverage afforded, the premium
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charged, the policy period, and the limits of liability;
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(ii)(A) if [it] the policy is an owner's policy, designate by appropriate reference all
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the motor vehicles on which coverage is granted, insure the person named in
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the policy, insure any other person using any named motor vehicle with the
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express or implied permission of the named insured, and, except as provided in
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Section 31A-22-302.5, insure any person included in Subsection (1)(a)(iii)
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against loss from the liability imposed by law for damages arising out of the
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ownership, maintenance, or use of these motor vehicles within the United
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States and Canada, subject to limits exclusive of interest and costs, for each
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motor vehicle, in amounts not less than the minimum limits specified under
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Section 31A-22-304; or
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(B) if [it] the policy is an operator's policy, insure the person named as insured
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against loss from the liability imposed upon [him] the person by law for
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damages arising out of the insured's use of any motor vehicle not owned by [
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him] the person, within the same territorial limits and with the same limits of
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liability as in an owner's policy under Subsection (1)(a)(ii)(A);
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(iii) except as provided in Section 31A-22-302.5, insure persons related to the named
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insured by blood, marriage, adoption, or guardianship who are residents of the
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named insured's household, including [those] a person who usually [make their]
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makes the person's home in the same household but temporarily [live] lives
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elsewhere, to the same extent as the named insured;
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[(iv) where a claim is brought by the named insured or a person described in
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Subsection (1)(a)(iii), the available coverage of the policy may not be reduced or
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stepped-down because:]
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[(A) a permissive user driving a covered motor vehicle is at fault in causing an
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accident; or]
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[(B) the named insured or any of the persons described in Subsection (1)(a)(iii)
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driving a covered motor vehicle is at fault in causing an accident; and]
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[(v)] (iv) cover damages or injury resulting from a covered driver of a motor vehicle
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who is stricken by an unforeseeable paralysis, seizure, or other unconscious
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condition and who is not reasonably aware that paralysis, seizure, or other
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unconscious condition is about to occur to the extent that a person of ordinary
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prudence would not attempt to continue driving[.] ; and
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(v) cover the difference in market value of an insured's motor vehicle calculated in a
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manner the commissioner establishes by rule in compliance with Subsection (10).
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(b) Where a named insured or a person described in Subsection (1)(a)(iii) brings a claim,
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the available coverage of the policy may not be reduced or stepped-down because:
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(i) a permissive user driving a covered motor vehicle is at fault in causing an
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accident; or
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(ii) the named insured or any of the persons described in Subsection (1)(a)(iii) driving
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a covered motor vehicle is at fault in causing an accident.
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[(b)] (c) The driver's liability under Subsection [(1)(a)(v)] (1)(a)(iv) is limited to the
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insurance coverage.
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[(c)] (d)(i) "Guardianship" under Subsection (1)(a)(iii) includes the relationship
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between a foster parent and a minor who is in the legal custody of the Division of
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Child and Family Services if:
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(A) the minor resides in a foster home, as defined in Section 62A-2-101, with a
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foster parent who is the named insured; and
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(B) the foster parent has signed to be jointly and severally liable for compensatory
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damages caused by the minor's operation of a motor vehicle in accordance with
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Section 53-3-211.
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(ii) "Guardianship" as defined under this Subsection [(1)(c)] (1)(d) ceases to exist
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when a minor described in Subsection [(1)(c)(i)(A)] (1)(d)(i)(A) is no longer a
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resident of the named insured's household.
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(2)(a) A policy containing motor vehicle liability coverage under Subsection
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31A-22-302(1)(a) may:
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(i) provide for the prorating of the insurance under that policy with other valid and
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collectible insurance;
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(ii) grant any lawful coverage in addition to the required motor vehicle liability
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coverage;
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(iii) if an insurer issues the policy [is issued ]to a person other than a motor vehicle
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business, limit the coverage afforded to a motor vehicle business or its officers,
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agents, or employees to the minimum limits under Section 31A-22-304, and to
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those instances when there is no other valid and collectible insurance with at least
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those limits, whether the other insurance is primary, excess, or contingent; and
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(iv) if [issued] an insurer issues the policy to a motor vehicle business, restrict
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coverage afforded to anyone other than the motor vehicle business or its officers,
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agents, or employees to the minimum limits under Section 31A-22-304, and to
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those instances when there is no other valid and collectible insurance with at least
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those limits, whether the other insurance is primary, excess, or contingent.
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(b)(i) The liability insurance coverage of a permissive user of a motor vehicle owned
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by a motor vehicle business shall be primary coverage.
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(ii) The liability insurance coverage of a motor vehicle business shall be secondary to
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the liability insurance coverage of a permissive user as specified under Subsection
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(2)(b)(i).
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(3) Motor vehicle liability coverage need not insure any liability:
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(a) under any workers' compensation law under Title 34A, Utah Labor Code;
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(b) resulting from bodily injury to or death of an employee of the named insured, other
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than a domestic employee, while engaged in the employment of the insured, or while
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engaged in the operation, maintenance, or repair of a designated vehicle; or
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(c) resulting from damage to property owned by, rented to, bailed to, or transported by
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the insured.
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(4) An insurance carrier providing motor vehicle liability coverage has the right to settle
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any claim covered by the policy, and if the insurance carrier makes the settlement [is
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made ]in good faith, the amount of the settlement is deductible from the limits of
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liability specified under Section 31A-22-304.
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(5) A policy containing motor vehicle liability coverage imposes on the insurer the duty to
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defend, in good faith, any person insured under the policy against any claim or suit
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seeking damages which would be payable under the policy.
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(6)(a) If a policy containing motor vehicle liability coverage provides an insurer with the
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defense of lack of cooperation on the part of the insured, that defense is not effective
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against a third person making a claim against the insurer, unless there was collusion
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between the third person and the insured.
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(b) If the defense of lack of cooperation is not effective against the claimant, after
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payment, the insurer is subrogated to the injured person's claim against the insured to
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the extent of the payment and is entitled to reimbursement by the insured after the
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injured third person has been made whole with respect to the claim against the
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insured.
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(7)(a) A policy of motor vehicle coverage may limit coverage to the policy minimum
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limits under Section 31A-22-304 if the policy or a specifically reduced premium was
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extended to the insured upon express written declaration executed by the insured that
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the insured motor vehicle would not be operated by a person described in Subsection
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(7)(c) operating in a manner described in Subsection (7)(b)(i).
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(b)(i) A policy of motor vehicle liability coverage may limit coverage as described in
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Subsection (7)(a) if the insured motor vehicle is operated by an individual
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described in Subsection (7)(c) if the individual described in Subsection (7)(c) is
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guilty of:
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(A) driving under the influence as described in Section 41-6a-502;
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(B) impaired driving as described in Section 41-6a-502.5; or
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(C) operating a vehicle with a measurable controlled substance in the individual's
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body as described in Section 41-6a-517.
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(ii) An individual's refusal to submit to a chemical test as described in Sections
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41-6a-520 and 41-6a-520.1 is admissible evidence, but not conclusive, that the
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individual is guilty of an offense described in Subsection (7)(b)(i).
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(c) A reduction in coverage as described in Subsection (7)(a) applies to the following
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individuals:
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(i) the insured;
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(ii) the spouse of the insured; or
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(iii) if the individual has a separate policy as a secondary source of coverage, and:
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(A) the individual is over [the age of 21] 21 years old and resides in the household
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of the insured; or
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(B) the individual is a permissible user of the motor vehicle.
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(d) A reduction in coverage as described in Subsection (7)(a) does not apply to an
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individual under [the age of 21] 21 years old who is a relative of the insured and a
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resident of the insured's household.
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(8)(a) When a claim is brought exclusively by a named insured or a person described in
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Subsection (1)(a)(iii) and asserted exclusively against a named insured or an
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individual described in Subsection (1)(a)(iii), the claimant may elect to resolve the
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claim:
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(i) by submitting the claim to binding arbitration; or
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(ii) through litigation.
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(b) Once the claimant has elected to commence litigation under Subsection (8)(a)(ii), the
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claimant may not elect to resolve the claim through binding arbitration under this
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section without the written consent of both parties and the defendant's liability insurer.
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(c)(i) Unless otherwise agreed on in writing by the parties, a panel of three arbitrators
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shall resolve a claim [that is submitted] the parties submit to binding arbitration
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under Subsection (8)(a)(i)[ shall be resolved by a panel of three arbitrators].
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(ii)(A) Unless otherwise agreed on in writing by the parties, each party shall select
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an arbitrator.
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(B) The arbitrators selected by the parties shall select a third arbitrator.
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(d)(i) Unless otherwise agreed on in writing by the parties, each party [will] shall pay
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the fees and costs of the arbitrator that party selects.
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(ii) Both parties shall share equally the fees and costs of the third arbitrator.
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(e) Except as otherwise provided in this section, an arbitration procedure conducted
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under this section shall be governed by Title 78B, Chapter 11, Utah Uniform
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Arbitration Act, unless otherwise agreed on in writing by the parties.
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(f)(i) [Discovery shall be conducted] The parties shall conduct discovery in
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accordance with Rules 26b through 36, Utah Rules of Civil Procedure.
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(ii) [All ] The arbitration panel shall resolve all issues of discovery[ shall be resolved
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by the arbitration panel].
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(g) A written decision of two of the three arbitrators shall constitute a final decision of
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the arbitration panel.
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(h) [Prior to ] Before the rendering of the arbitration award:
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(i) the existence of a liability insurance policy may be disclosed to the arbitration
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panel; and
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(ii) the amount of all applicable liability insurance policy limits may not be disclosed
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to the arbitration panel.
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(i)(i) The amount of the arbitration award may not exceed the liability limits of all the
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defendant's applicable liability insurance policies, including applicable liability
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umbrella policies.[ ]
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(ii) If the initial arbitration award exceeds the liability limits of all applicable liability
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insurance policies, the arbitration award shall be reduced to an amount equal to
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the liability limits of all applicable liability insurance policies.
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(j) The arbitration award is the final resolution of all claims between the parties unless
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the award was procured by corruption, fraud, or other undue means.
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(k) If the arbitration panel finds that [the action was not brought, pursued, or defended ] a
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party did not bring, pursue, or defend the action in good faith, the arbitration panel
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may award reasonable fees and costs against the party that failed to bring, pursue, or
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defend the claim in good faith.
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(l) Nothing in this section is intended to limit any claim under any other portion of an
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applicable insurance policy.
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(9) An at-fault driver or an insurer issuing a policy of insurance under this part that is
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covering an at-fault driver may not reduce compensation to an injured party based on the
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injured party not being covered by a policy of insurance that provides personal injury
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protection coverage under Sections 31A-22-306 through 31A-22-309.
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(10) The department shall establish by rule, in accordance with Title 63G, Chapter 3, Utah
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Administrative Rulemaking Act, a formula that an insurer shall use to calculate the
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difference in market value for a motor vehicle from before and after an accident
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involving the motor vehicle.
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Section 2. Section 31A-22-319 is amended to read:
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31A-22-319 . Prohibition on insurer requiring certain parts -- Disclosure.
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(1) Unless [the insured is given notice] the insurer gives the insured notice in writing, an
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insurer may not [specify] permit the use of non-OEM aftermarket crash parts in the
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repair of an insured's motor vehicle.
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(2) [ ]The notice [ ]required by Subsection (1) shall identify non-OEM parts as not made
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for or by the vehicle manufacturer.
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[(2)] (3) Unless [the consumer is given] the insurer gives the insured notice in writing [prior
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to] before installation, a repair facility or installer may not use non-OEM aftermarket
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parts to repair a vehicle.
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[(3)] (4) In all instances where [non-OEM aftermarket crash parts are intended for use by an
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insurer] an insurer intends to use non-OEM aftermarket crash parts:
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(a) the written estimate shall clearly identify each non-OEM aftermarket crash part;[ and]
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(b) a disclosure document containing the following statements in 10 point or larger type
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shall appear on or be attached to the insured's copy of the estimate: "This estimate
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has been prepared based on the use of crash parts supplied by a source other than the
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manufacturer of your motor vehicle. Warranties applicable to these replacement
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parts are provided by the manufacturer or distributor of these parts rather than the
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manufacturer of your vehicle."; and
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(c) the repair facility or installer shall use non-OEM aftermarket crash parts that are
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substantially equivalent in quality and function to OEM aftermarket crash parts.
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Section 3. Effective Date.
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This bill takes effect on May 7, 2025.
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