HB 119 — Automotive Repair Business Amendments

(i) provide for the prorating of the insurance under that policy with other valid and collectible insurance;

(ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;

(iii) if an insurer issues the policy [is issued ]to a person other than a motor vehicle business, limit the coverage afforded to a motor vehicle business or [its] the motor vehicle business's officers, agents, or employees to the minimum limits under Section 31A-22-304, and to those instances when there is no other valid and collectible insurance with at least those limits, whether the other insurance is primary, excess, or contingent;

and (iv) if [issued] an insurer issues the policy to a motor vehicle business, restrict coverage afforded to anyone other than the motor vehicle business or its officers, agents, or employees to the minimum limits under Section 31A-22-304, and to those instances when there is no other valid and collectible insurance with at least those limits, whether the other insurance is primary, excess, or contingent.

(b) - 4 - HB0119 compared with HB0119S05 (i) The liability insurance coverage of a permissive user of a motor vehicle owned by a motor vehicle business shall be primary coverage.

(ii) The liability insurance coverage of a motor vehicle business shall be secondary to the liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).

(3) Motor vehicle liability coverage need not insure any liability:

(a) under any workers' compensation law under Title 34A, Utah Labor Code;

(b) resulting from bodily injury to or death of an employee of the named insured, other than a domestic employee, while engaged in the employment of the insured, or while engaged in the operation, maintenance, or repair of a designated vehicle;

or (c) resulting from damage to property owned by, rented to, bailed to, or transported by the insured.

(4) An insurance carrier providing motor vehicle liability coverage has the right to settle any claim covered by the policy, and if the insurance carrier makes the settlement [is made ]in good faith, the amount of the settlement is deductible from the limits of liability specified under Section 31A-22-304.

(5) A policy containing motor vehicle liability coverage imposes on the insurer the duty to defend, in good faith, any person insured under the policy against any claim or suit seeking damages which would be payable under the policy.

(6) (a) If a policy containing motor vehicle liability coverage provides an insurer with the defense of lack of cooperation on the part of the insured, that defense is not effective against a third person making a claim against the insurer, unless there was collusion between the third person and the insured.

(b) If the defense of lack of cooperation is not effective against the claimant, after payment, the insurer is subrogated to the injured person's claim against the insured to the extent of the payment and is entitled to reimbursement by the insured after the injured third person has been made whole with respect to the claim against the insured.

(7) (a) A policy of motor vehicle coverage may limit coverage to the policy minimum limits under Section 31A-22-304 if the policy or a specifically reduced premium was extended to the insured upon express written declaration executed by the insured that the insured motor vehicle would not be operated by a person described in Subsection (7)(c) operating in a manner described in Subsection (7)(b)(i).

- 5 - HB0119 compared with HB0119S05 (b) (i) A policy of motor vehicle liability coverage may limit coverage as described in Subsection (7) (a) if the insured motor vehicle is operated by an individual described in Subsection (7)(c) if the individual described in Subsection (7)(c) is guilty of:

(A) driving under the influence as described in Section 41-6a-502;

(B) impaired driving as described in Section 41-6a-502.5;

or (C) operating a vehicle with a measurable controlled substance in the individual's body as described in Section 41-6a-517.

(ii) An individual's refusal to submit to a chemical test as described in Sections 41-6a-520 and 41-6a-520.1 is admissible evidence, but not conclusive, that the individual is guilty of an offense described in Subsection (7)(b)(i).

(c) A reduction in coverage as described in Subsection (7)(a) applies to the following individuals:

(i) the insured;

(ii) the spouse of the insured;

or (iii) if the individual has a separate policy as a secondary source of coverage, and:

(A) the individual is over [the age of 21] 21 years old and resides in the household of the insured;

or (B) the individual is a permissible user of the motor vehicle.

(d) A reduction in coverage as described in Subsection (7)(a) does not apply to an individual under [the age of 21] 21 years old who is a relative of the insured and a resident of the insured's household.

(8) (a) When a claim is brought exclusively by a named insured or a person described in Subsection (1)(a) (iii) and asserted exclusively against a named insured or an individual described in Subsection (1)(a) (iii), the claimant may elect to resolve the claim:

(i) by submitting the claim to binding arbitration;

or (ii) through litigation.

(b) Once the claimant has elected to commence litigation under Subsection (8)(a)(ii), the claimant may not elect to resolve the claim through binding arbitration under this section without the written consent of both parties and the defendant's liability insurer.

(c) - 6 - HB0119 compared with HB0119S05 (i) Unless otherwise agreed on in writing by the parties, a panel of three arbitrators shall resolve a claim that [is submitted] the parties submit to binding arbitration under Subsection (8)(a)(i)[ shall be resolved by a panel of three arbitrators].

(ii) (A) Unless otherwise agreed on in writing by the parties, each party shall select an arbitrator.[ ] (B) The arbitrators selected by the parties shall select a third arbitrator.

(d) (i) Unless otherwise agreed on in writing by the parties, each party [will] shall pay the fees and costs of the arbitrator that party selects.[ ] (ii) Both parties shall share equally the fees and costs of the third arbitrator.

(e) Except as otherwise provided in this section, an arbitration procedure conducted under this section shall be governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act, unless otherwise agreed on in writing by the parties.

(f) (i) [Discovery shall be conducted ] The parties shall conduct discovery in accordance with Rules 26b through 36, Utah Rules of Civil Procedure.

(ii) [All ] The arbitration panel shall resolve all issues of discovery[ shall be resolved by the arbitration panel].

(g) A written decision of two of the three arbitrators shall constitute a final decision of the arbitration panel.

(h) [Prior to the ] Before the rendering of the arbitration award:

(i) the existence of a liability insurance policy may be disclosed to the arbitration panel;

and (ii) the amount of all applicable liability insurance policy limits may not be disclosed to the arbitration panel.

(i) (i) The amount of the arbitration award may not exceed the liability limits of all the defendant's applicable liability insurance policies, including applicable liability umbrella policies.[ ] (ii) If the initial arbitration 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.

- 7 - HB0119 compared with HB0119S05 (j) The arbitration award is the final resolution of all claims between the parties unless the award was procured by corruption, fraud, or other undue means.

(k) If the arbitration panel finds [that the action was not brought, pursued, or defended in good faith] a party did not bring, pursue, or defend the action in good faith, the arbitration panel may award reasonable fees and costs against the party that failed to bring, pursue, or defend the claim in good faith.

(l) Nothing in this section is intended to limit any claim under any other portion of an applicable insurance policy.

(9) An at-fault driver or an insurer issuing a policy of insurance under this part that is covering an at- fault driver may not reduce compensation to an injured party based on the injured party not being covered by a policy of insurance that provides personal injury protection coverage under Sections 31A-22-306 through 31A-22-309.

(10) The department shall establish by rule, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, a formula that an insurer shall use to calculate the difference in market value for a motor vehicle from before and after an accident involving the motor vehicle.

31A-22-317.31A-22-317 .

AsH.B. used in Sections 31A-22-316 through 31A-22-319:

119 Enrolled Copy As used in Sections 31A-22-316 through 31A-22-319:

- 8 - HB0119 compared with HB0119S05 Section 2.

31A-22-319.31A-22-319 .

(1) Unless [the insured is given] an insurer gives an insured{ notice{]} the insurer gives the insured notice}notice in writing{,}writing an insurer may not {[specify{]}specify permit} the use of non-OEM aftermarket crash parts in the repair of an insured's motor vehicle.[ {] {(2)} The notice{[}notice {]} required by Subsection (1) shall identify non-OEM parts as not made for or by the vehicle manufacturer.] [(2){][(2) {(3)} } Unless the {[} consumer is given{]given insurer gives the insured} notice in writing {[} prior to{]to before} installation, a repair facility or installer may not use non-OEM aftermarket parts to repair a vehicle.] (2)(2)(a) (a) For a policy issued on or after October 1, 2026, the insurer shall provide to the insured, at the time of issuance and renewal, a written notice stating that the insurer may authorize or specify the use of aftermarket crash parts in the event of a covered loss.

"In the event of a covered- loss,2 the- insurerEnrolled mayCopy authorizeH.B. or specify the use of aftermarket crash parts supplied by a source other than the manufacturer of your vehicle.

Parts119 usedcovered inloss, the repairinsurer ofmay yourauthorize vehicleor byspecify a manufacturer other than the originaluse manufacturer are required to be at least equal in kind and quality in terms of fit, quality, and performance to the original parts they are replacing." {[(3){]} {(4)} } [In all instances where {[} non-OEM aftermarket crash parts aresupplied intended for use by ana insurer{]source another insurerthan intends to use non-OEM aftermarket crash parts}:] When an insurer authorizes or specifies the usemanufacturer of ayour non-OEMvehicle. aftermarket crash part, [(a)] the written estimate shall:

(a)Parts [used ]clearlyin identifythe eachrepair non-OEMof aftermarketyour crashvehicle part;{[by and]}a (b)manufacturer [aother disclosurethan documentthe containingoriginal themanufacturer ]are containrequired theto followingbe [statements]at disclosureleast equivalent in [10kind pointand orquality largerin typeterms shallof appearfit, onquality, orand beperformance ]to atthe leastoriginal 10-pointparts font,they thatare appearsreplacing." on(3) or[In isall attachedinstances towhere thenon-OEM -aftermarket 9crash -parts HB0119are comparedintended withfor HB0119S05use insured'sby copyan insurer:] When an insurer authorizes or specifies the use of a non-OEM aftermarket crash part, [(a)] the estimate:written estimate shall:

"This(a) estimate[ has]clearly beenidentify preparedeach basednon-OEM on the authorization of your insurer and the use of aftermarket crash partspart; [supplied by a source other than the] not made by the original manufacturer of your motor vehicle.

and (b) [a disclosure document containing the ] contain the following [statements] disclosure in [10 point or larger type shall appear on or be ] at least 10-point font, that appears on or is attached to the insured's copy of the estimate:

"This estimate has been prepared based on the authorization of your insurer and the use of aftermarket crash parts [ supplied by a source other than the] not made by the original manufacturer of your motor vehicle.

{;Section 3.

and} {(c) the repair facility or installer shall use non-OEM aftermarket crash parts that are substantially equivalent in quality and function to OEM aftermarket crash parts.} {(5)} {(a) A motor vehicle owner has a right of action against a repair facility or installer that violates Subsection (4)(c).} {(b) If a motor vehicle owner brings an action against a repair facility or installer in accordance with Subsection (5)(a) and a court with jurisdiction determines that the repair facility or installer violated Subsection (4)(c):} {(i) the court shall award the motor vehicle owner actual damages caused by the violation of Subsection (4)(c);

and} {(ii) the repair facility or installer is not subject to any further penalty imposed by the department for the violation in accordance with Section 31A-2-308.} Section 3.

Effective date.

3-2-26 10:48 AM - 103 -