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1.14      Duty to Mitigate
        An insured’s duty to mitigate damages commences only when some
damage has occurred, of which the insured has knowledge. Gibbs M.
Smith, Inc. v. U.S. Fid. & Guar. Co., 949 P.2d 337 (Utah 1997).

1.15      Blanket Insurance
        Blanket policies cover groups of persons without individual
underwriting or application and are determined by definition with or
without designating each person covered. UCA § 31A-1-301(14).


2.1       Financial Responsibility
Relevant Statutes
          UCA § 31A-22-301 et seq.; § 41-12a-301 et seq.; § 41-12a-601
et seq.
Notable Law
        The Utah Court of Appeals ruled that UCA § 31A-22-314 does not
relieve rental car companies of their obligation to provide minimum
insurance under Utah’s Financial Responsibility of Motor Vehicles Owners
and Operators Act, even when other valid and collectible coverage exists.
Li v. Zhang, 2005 UT App 246, 120 P.3d 30.
        Estoppel may bar an insurer’s defense of noncoverage when an
insurance agent makes material misrepresentations to a prospective insured
before or at the time the contract is formed and the prospective insured
reasonably relies upon these misrepresentations. Youngblood v. Auto-
Owners Ins. Co., 2005 UT App 154, 111 P.3d 829.
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         Car rental companies are required to provide car renters with
primary insurance coverage when the renter does not have other valid or
collectible insurance. UCA § 31A-22-314(2).
         Resident owners and operators shall maintain security in effect at
any time the vehicle is operated on a highway within the state. The state
and its political subdivisions must maintain security for their vehicles.
Non-resident owners must maintain security as required by their home
state, and must meet the security requirements of Utah if the vehicle has
been present in the state for more than 90 days during the preceding 365
days. UCA § 41-12a-301(2).
        Proof of security may be established with a certificate of insurance,
a copy of a surety bond, a certificate of deposit, or a certificate of self-
funded coverage. UCA § 41-12a-401 et seq. Operating a vehicle without
required security is a class B misdemeanor. UCA § 41-12a-302.
         The tort immunity created by UCA § 31A-22-309(1) (no-fault
threshold) does not extend to a person who fails to have the security in
effect at the time of an accident, and the owner is personally liable for
payment of no-fault benefits. UCA § 41-12A-304.
        UCA § 31A-22-302 identifies components of the operators’
required security as liability coverage, no-fault coverage (except for
motorcycles, off-highway vehicles, street-legal-all-terrain vehicles, trailers
and semitrailers, which may be offered first party medical coverage),
uninsured motorist coverage unless affirmatively waived, and underinsured
motorist coverage unless affirmatively waived. If the insured requests,
coverage must also include uninsured motorist property damage protection
for the motor vehicle listed in the policy. UCA § 31A-22-305.5(1)(a).
         Liability policy minimum limits are $25,000 per person and
$65,000 per accident for bodily injury or death, and $15,000 per accident
for property damage; or $80,000 per accident for loss arising from personal
injury, death and/or property damage. UCA § 31A-22-304(1).
       Liability insurance of an individual who uses a motor vehicle
owned by a motor vehicle business will be the primary insurance on the
114                                           SNOW, CHRISTENSEN & MARTINEAU

vehicle, and the liability insurance of the motor vehicle business will be the
secondary insurance. UCA § 31A-22-303(2)(b).
          An adult who signs a minor’s driver license application is burdened
with joint and several liability for damages caused by the minor. That
liability is satisfied, however, by having minimum liability insurance on the
minor driver. UCA § 53-3-211(3)(b). However, if a Foster Parent signs the
application for a minor who is in the custody of the Department of Child
and Family Services and lives with the Foster Parent, the Foster Parent’s
liability may not exceed the greater of minimum liability policy limits
established in UCA § 31A-22-304 or the policy limits of the Foster Parent
that was in effect at the time of the loss caused by the minor’s operation of
a motor vehicle. UCA § 53-3-211(4)(b).
        Provisions in the policy preventing the stacking of uninsured and
underinsured motorist coverage are valid. Nielsen v. O’Reilly, 848 P.2d
664 (Utah 1992) (superseded by statute as stated in State Farm Mut. Auto.
Ins. Co. v. Green, 2003 UT 48, 89 P.2d 97). However, a covered person
under UCA § 31A-22-305(7). is entitled to the highest limits of uninsured
motorist coverage afforded for any one vehicle for which the covered
person is the named insured or an insured family member. UCA § 31A-22-
          The Department of Motor Vehicles is responsible for implementing
post-accident security requirements for those who fail to maintain security,
as set forth in UCA § 41-12a-501 et seq. The Department’s findings,
actions, or requirements concerning post-accident security and accident
reports prepared by the operator(s) under UCA § 41-12a-502 may not be
referenced and are inadmissible as evidence of negligence or due care in
the trial of any action to recover damages. UCA § 41-12a-510.
        In an action to void an auto insurance policy due to material mis-
representations, the Safety Responsibility Act precludes rescission after the
occurrence of the accident to the extent of the minimum coverages required
in the No-Fault Act. Dairyland Ins. Corp. v. Smith, 646 P.2d 737 (Utah
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      Self-insured is obligated to pay benefits as would any insurer.
Chambers v. Agency Rent-A-Car, 878 P.2d 1164 (Utah Ct. App. 1994).
        Under the Safety Responsibility Act, a named driver exclusion was
void up to minimum statutory requirements. A named driver exclusion
was valid in relation to coverage exceeding the minimum statutory require-
ments. Allstate Ins. Co. v. U.S. Fid. & Guar. Co., 619 P.2d 329 (Utah
         Exclusions which violate statute(s) are invalid to the extent of the
mandatory statutory minimum. A household exclusion is invalid under the
statute and for failure to give full and adequate notice. Farmers Ins.
Exch. v. Call, 712 P.2d 231 (Utah 1985). A household exclusion is valid,
however, as to benefits provided in excess of the statutory minimum. State
Farm Mut. Auto. Ins. Co. v. Mastbaum, 748 P.2d 1042 (Utah 1987);
National Farmers Union Prop. & Cas. Co. v. Moore, 882 P.2d 1168 (Utah
Ct. App. 1994). Household member who has been specifically excluded
from coverage is not covered as a permissive user. Dairyland Ins. Co. v.
State Farm Mut. Auto. Ins. Co., 882 P.2d 1143 (Utah 1994) (emphasis
         Loss of consortium is not a cognizable bodily injury for the
purposes of minimum liability policies. The wife of a man who was killed
in an automobile accident could therefore recover only $25,000 from her
insurer, not $50,000. Progressive Cas. Ins. Co. v. Ewart, 2007 UT 52,
167 P.3d 1011.
        A vehicle owner may not delegate the duty to maintain liability
insurance to the vehicle’s operator. Li v. Enterprise Rent-A-Car Co. of
Utah, 2006 UT 80, 150 P.3d 471.
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2.2     Personal Injury Protection / No Fault
Relevant Statutes
        UCA §§ 31A-22-303, -307, -309, -314
Notable Law
        Insurers are required to pay for damages and injuries caused by a
covered driver while stricken by an unforeseeable paralysis, seizure, or
other unconscious condition. UCA § 31A-22-303(1)(a)(v).
        A policy of motor vehicle liability coverage may limit coverage to
statutory minimum policy limits if the insured motor vehicle is operated by
a person who has consumed any alcohol or illegal substance, if the policy
or a specifically reduced premium was extended to the insured with a
written stipulation that the vehicle would not be operated in this manner.
UCA § 31A-22-303(8).
          A no-fault insurer has no right to subrogation under Utah’s no-fault
statute, and as a general rule may not seek reimbursement for PIP (personal
injury protection) payments its insured subsequently recovers from the
tortfeasor. However, no-fault insurers may obtain reimbursement for PIP
payments directly from their insureds’ settlement with tortfeasors when it
is clear the parties to the settlement intended that settlement amount include
PIP reimbursement. Since a tortfeasor is not personally liable for PIP
benefits, the settlement between the no-fault insured and the tortfeasor or
tortfeasor’s insurer is presumed to exclude PIP benefits in the absence of
evidence to the contrary. Bear River Mut. Ins. Co. v. Wall, 937 P.2d 1282
(Utah Ct. App. 1997), aff’d 1999 UT 33, 978 P.2d 460.
         Coverage is mandatory and minimum coverage must include
medical expenses up to $3000, lost income allowance of 85% of gross
income up to $250 per week for 52 consecutive weeks, special damage
allowance up to $20 per day for a maximum of 365 days, funeral/
burial/cremation expenses up to $1500 per person, and death benefit of
$3000. UCA § 31A-22-307(1).
         Provisions for lost income and lost household services do not apply
to the heirs or estate of a person killed in an automobile accident; they are
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personal to a living person injured in an automobile accident. Regal Ins.
Co. v. Bott, 2001 UT 71, 31 P.3d 524.
        The insurer may issue policies providing greater than the minimum
coverages, but the insurer may not require a deductible. UCA § 31A-22-
307(5), (6).
        Minimum coverages extend to the insured, persons related to the
insured, and other natural persons whose injuries arise out of an automobile
accident involving the automobile identified in the policy, including
pedestrians. UCA § 31A-22-308.
         A person who has direct benefit coverage under PIP may not main-
tain a cause of action for general damages unless he has sustained death,
dismemberment, permanent disability, or permanent impairment based
upon objective findings, permanent disfigurement, and/or medical expenses
in excess of $3000. UCA § 31A-22-309(1)(a).
       A plaintiff whose medical expenses fail to meet the PIP threshold
of $3,000 has the burden of demonstrating a permanent disability or
impairment with something more than his say so. The express language of
UCA § 31A-22-309(1)(c) requires that any permanent disability or
impairment be based on objective findings. McNair v. Farris, 944 P.2d 392
(Utah 1997).
        The benefits payable to an injured person are reduced by the
benefits a person is entitled to receive under workers compensation or from
active duty in the military service. UCA § 31A-22-309(3).
        When an injured person is insured under more than one policy, the
policy insuring the motor vehicle in use at the time of the accident is
primary. UCA § 31A-22-309(4). Non-stacking provisions in the policy are
valid and enforceable. Crowther v. Nationwide Mut. Ins. Co., 762 P.2d
1119 (Utah Ct. App. 1988).
         Where the insured is or would be legally liable for injuries
sustained by another, his insurer must reimburse any insurer or workers
compensation fund for no-fault benefits paid to the other. The issue of
liability for reimbursement is subject to mandatory, binding arbitration.
UCA § 31A-22-309(6)(a). Ohio Cas. Ins. Co. v. Brundage, 674 P.2d 101
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(Utah 1983). There is no right of reimbursement between insurers when
the insurer of the person who would be held liable has paid its policy limits.
UCA § 31A-22-309(6)(b).
        The term “disability” under the Act means an inability to work as
contrasted with the term “physical impairment,” which generally refers to
loss of bodily function. Jones v. Transamerica Ins. Co., 592 P.2d 609
(Utah 1979), overruled on other grounds by Bear River Mut. Ins. Co. v.
Wall, 937 P.2d 1282 (Utah Ct. App. 1997).
         The auto liability insurer is not entitled to recover no-fault pay-
ments it made to its insured out of the proceeds of a settlement with a third-
party tortfeasor. Allstate Ins. Co. v. Anderson, 608 P.2d 235 (Utah 1980).
However, the Act does grant the insurer a limited, equitable right to seek
reimbursement in arbitration against the third party’s liability insurer.
Allstate Ins. Co. v. Ivie, 606 P.2d 1197 (Utah 1980); Christensen v.
Farmers Ins. Exch., 669 P.2d 1236 (Utah 1983).
        Twelve-year-old boy’s household chores of taking out the garbage,
doing dishes, vacuuming, etc., were not chores for which his family would
“reasonably have incurred” expenses within meaning of no-fault statute.
Jamison v. Utah Home Fire Ins. Co., 559 P.2d 958 (Utah 1977).
        In light of financial security statute, insurance policy did not
provide no-fault coverage to son of named insured in connection with son’s
use of a motorcycle owned by another person. Barber v. Farmers Ins.
Exch., 751 P.2d 248 (Utah Ct. App. 1988).
         PIP benefits extend to items not covered by workers compensation
such as loss of household services and second job wage loss. A provision
in an auto insurance policy which prohibited payments or benefits to those
covered by workers compensation is invalid. Neel v. State, 889 P.2d 922
(Utah 1995).
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2.3     Property Damage Protection
Relevant Statute
        UCA § 31A-22-305.5
Notable Law
         For policies that do not provide collision damage protection, at the
request of the insured, the insurer shall provide coverage for payment for
loss or damage to the insured’s vehicle, not to exceed the vehicle’s actual
cash value or $3500, whichever is less. The coverage extends to those who
are entitled to recover damages from the owner or operator of an uninsured
vehicle. UCA § 31A-22-305.5.
        Coverage is payable only if the damage involves actual physical
contact between the covered vehicle and the uninsured vehicle, if the
uninsured vehicle’s license plate number, owner, or driver is identified and
the occurrence is reported to the insurance company or agent within ten
days. UCA § 31A-22-305.5(3).
        Coverage is subject to a minimum $250 deductible and is excess
to any other insurance covering property damage to the covered vehicle.
UCA § 31A-22-305.5(4).

2.4     Uninsured Motorist Coverage
Relevant Statute
        UCA § 31A-22-305
Notable Law
        Utah Code Ann. § 31A-22-305 was amended in 2004 to prohibit
“interpolicy stacking,” which means recovering benefits for a single
incident of loss under more than one insurance policy, except in certain
circumstances. The amendment applies retroactively to any claim made on
or after January 1, 1995 for which a court has not issued a final
unappealable order as of May 2004. UCA § 31A-22-305(6).
        An insurer may offer, at appropriate premium rates, additional
uninsured motorist coverage above the limits in Subsection (2) and
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additional deductibles for the coverage in Subsection (5)(a) above the limits
provided in Subsection (4). UCA § 31A-22-305.5(5).
          Passengers who were injured in automobile accident sought to
recover supplementary underinsured motorist (SUM) benefits from their
insurer. The statute allowing the stacking of SUM benefits did not apply
to automobile policy that was renewed in New York while insureds were
still living there. Travelers/Aetna Ins. Co. v. Wilson, 2002 UT App 221,
51 P.3d 1288.
        Even if the uninsured motorist coverage of the insurance policy
does not include a provision for reimbursement of rental vehicle expenses
incurred, if the insurer breaches its contractual obligation to promptly pay
the insured, the insurer may be liable for actual costs incurred in renting a
replacement vehicle. Castillo v. Atlanta Cas. Co., 939 P.2d 1204 (Utah Ct.
App. 1997).
        An insurer providing uninsured motorist coverage to an insured
involved in an accident may intervene in an action to determine the liability
of an uninsured motorist. The intervening insurer may be required to
provide independent legal counsel to its insured or to reimburse its insured
for reasonable legal expenses incurred in defending against the insurer’s
intervention. Chatterton v. Walker, 938 P.2d 255 (Utah 1997).
        Receipt of workers compensation benefits precludes claims by
employees against their own insurer under underinsured motorists provi-
sions. Peterson v. Utah Farm Bureau Ins. Co., 927 P.2d 192 (Utah Ct.
App. 1996). Uninsured motorist coverage may not be reduced by any
benefits provided by workers compensation insurance. UCA § 31A-22-
         This coverage must be included in the policy unless affirmatively
rejected by an express writing to the insurer. However, persons engaged
in the business of transportation of people must provide uninsured motorist
coverage of at least $25,000 per person and $500,000 per accident.
UCA § 31A-22-305(4)(b)(i).
        When a person claims that a phantom vehicle caused the accident
without touching the covered person or vehicle occupied by the covered
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person, the covered person must show the existence of the other vehicle by
clear and convincing evidence, which shall consist of more than the
covered person’s testimony. UCA § 31A-22-305(5).
         “Uninsured motor vehicle” includes a vehicle insured for less than
the statutory minimum, an unidentified vehicle that left the scene of an
accident which the operator caused, a vehicle that has a liability policy but
coverage for an accident is disputed by the liability insurer for more than
60 days, and a vehicle where the insurer has been competently declared
insolvent. UCA § 31A-22-305(2).
        The statute does not require the insurer to provide coverage on a
vehicle which is owned by the insured but is not specifically named as an
insured vehicle. Uninsured coverage was intended to rest with the vehicle
and not with the named insured. The uninsured coverage on claimant’s car
did not extend to cover the claimant during use of a motorcycle that
claimant owned but failed to insure. Clark v. State Farm Mut. Auto. Ins.
Co., 743 P.2d 1227 (Utah 1987). However, where the policy did not define
“unlisted automobile” to include the motorcycle under the exclusion,
motorcycle was not an unlisted “automobile.” Bear River Mut. Ins. Co. v.
Wright, 770 P.2d 1019 (Utah Ct. App. 1989).
         The terms of the uninsured motorist coverage limiting liability to
the statutory minimum were enforced where the insured was injured while
riding as a passenger in his insured vehicle that was being driven by an
uninsured permissive user. Wagner v. Farmers Ins. Exch., 786 P.2d 763
(Utah Ct. App. 1990), abrogated on other grounds by Nielsen v. O’Reilly,
848 P.2d 664 (Utah 1992).
        A common law spouse may receive uninsured motorist benefits
under a provision allowing coverage for the insured and “family members.”
Whyte v. Blair, 885 P.2d 791 (Utah 1994).
         UIM policies written after January 1, 2001, must have limits equal
the insured’s liability limits or the maximum uninsured coverage limits
available under the policy, whichever is less. Insured may elect a lower
limit or waiver coverage only after their insurer explains the consequences
of denying UM coverage and the insured gives a written acknowledgment.
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General Sec. Indem. Co. of Ariz. v. Tipton, 2007 UT App 109, 158 P.3d
1121. UCA § 31A-22-305(3)(b).

2.5     Underinsured Motorist Coverage
Relevant Statutes
        UCA § 31A-22-305
Notable Law
        In Berkemeir v. Hartford Ins. Co., 2004 UT 104, 106 P.3d 700, the
Utah Supreme Court ruled that limitations on damages contained in Utah’s
Survival Statute do not apply to a claim for payment of underinsured
motorist coverage benefits by an insured’s heirs.
        UIM (underinsured motorist) policies written after January 1, 2001,
must have limits equal the insured’s liability limits or the maximum
uninsured coverage limits available under the policy, whichever is less.
UCA § 31A-22-305(3)(b). The insured can waive UIM coverage by signing
a document provided by the insurer that explains the coverage and explains
what is waived. The insured must file the waiver with the department.

2.6     Use of Credit Information
Relevant Statutes
        UCA § 31A-22-320
Notable Law
        Insurers must follow new statutory guidelines when they seek to
use consumer credit information and credit scores when making decisions
about the issuance of motor vehicle insurance policies. UCA § 31A-22-
         An insurer may not use credit information to determine renewal,
nonrenewal, termination, eligibility, underwriting, or ratings for the
relevant motor vehicle policy. UCA § 31A-22-320(2)(a). However, an
insurer may use credit information for determining initial underwriting if
other risk factors are considered, or to provide the insured a reduction in
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rates (or any other similar discount) for the motor vehicle policy. UCA
§ 31A-22-320(2)(b).

2.7     Arbitration
Relevant Statutes
        UCA § 31A-22-303
Notable Law
         When a claim is brought exclusively by a named insured or
relatives residing in the named insured’s household against a named insured
or relative residing in the named insured’s household, the claimant may
elect to resolve the claim through binding arbitration or litigation.
UCA § 31A-22-303(9). Once a claimant has elected to start litigation, the
claimant may not choose to resolve the claim through arbitration without
written consent of both parties and the defendant’s liability insurer. UCA
§ 31A-22-303(9)(b).
        The procedure for arbitration is outlined in UCA § 31A-22-
        Significantly, prior to the rendering of the arbitration award, the
existence of a liability insurance policy may be disclosed to the arbitration
panel, but the amount of all applicable liability insurance policy limits may
not be disclosed to the arbitration panel. UCA § 31A-22-303(9)(h).
         The amount of the arbitration award may not exceed the liability
limits of all the defendants’ applicable liability insurance policies,
including applicable liability umbrella policies. If the initial award exceeds
the liability limits of all applicable liability insurance policies, the
arbitration award shall be reduced to an amount equal to the liability limits
of all applicable liability insurance policies. UCA § 31A-22-303(9)(i).
        The arbitration award is the final resolution between the parties
unless the award was obtained through fraud, corruption, or undue means.
UCA § 31A-22-303(9)(j).
       A person injured as a result of a motor vehicle accident may elect
to submit all third party bodily injury claims to arbitration if the claimant
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has previously and timely filed a complaint with the district court that
includes a third party bodily injury claim. Notice to submit the claim to
arbitration must be filed within 14 days after the complaint has been
answered. UCA § 31A-22-321(1)(a).
        If a party submits a claim to arbitration, they are limited to an
award of $25,000 in addition to any available personal injury protection
benefits and any claims for property damage. UCA § 31A-22-321(2)(b).
        A claim for property damage may not be made in arbitration unless
agreed upon in writing by both parties. UCA § 31A-22-321(2)(c). A claim
for punitive damages may never be made in an arbitration. UCA § 31A-22-
         A person who has elected to have an arbitration proceeding may
rescind if the rescission is made within 90 days after the election to
arbitrate and no less than 30 days before any scheduled arbitration hearing.
A notice of rescission must be filed with the district court and sent to all
counsel of record. UCA § 31A-22-321(4)(a)-(b). Once a party has elected
to arbitrate a claim and then rescinded, they may not choose to arbitrate the
claim under this section again. UCA § 31A-22-321(4)(d).
        UCA §§ 31A-22-321(5)-(10) outline the procedure of arbitration.
         The arbitration award is the final resolution of all bodily injury
claims between the parties unless either party files a request for a trial de
novo and serves the non-moving party within 20 days after service of the
arbitration award. UCA § 31A-22-321(11).
         If the plaintiff as the moving party in a trial de novo does not
receive a verdict that is at least $5,000 and at least 35% greater than the
arbitration award, the plaintiff is responsible for all of the non-moving
party’s costs up to $4,000. The same is true for if a moving defendant does
not receive a verdict that is at least 35% less than the arbitration award.
UCA §§ 31A-22-321(13)-(14) (emphasis added).
       If a defendant requests a trial de novo, the verdict at trial may not
exceed $40,000. If a plaintiff requests a trial de novo, the verdict may not
exceed $25,000. UCA § 31A-22-321(18).

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