The Vermont Statutes Online

Title 23: Motor Vehicles

Chapter 011: Financial Responsibility and Insurance

• Subchapter 001: GENERAL PROVISIONS

• § 800. Maintenance of financial responsibility

  [Subsection (a) as currently effective; see also subsection (a) contingently amended set out below.]

  (a) No owner of a motor vehicle required to be registered, or operator required to be licensed or issued a learner’s permit, shall operate or permit the operation of the vehicle upon the highways of the State without having in effect an automobile liability policy or bond in the amounts of at least $25,000.00 for one person and $50,000.00 for two or more persons killed or injured and $10,000.00 for damages to property in any one crash. In lieu thereof, evidence of self-insurance in the amount of $115,000.00 must be filed with the Commissioner of Motor Vehicles and shall be maintained and evidenced in a form prescribed by the Commissioner. The Commissioner may require that evidence of financial responsibility be produced before motor vehicle inspections are performed pursuant to the requirements of section 1222 of this title.

  [Subsection (a) as contingently amended by 2015, No. 50, § 6; see also subsection (a) currently effective set out above.]

  (a) No owner of a motor vehicle required to be registered, or operator required to be licensed or issued a learner’s permit, shall operate or permit the operation of the vehicle upon the highways of the State without having in effect an automobile liability policy or bond in the amounts of at least $25,000.00 for one person and $50,000.00 for two or more persons killed or injured and $10,000.00 for damages to property in any one crash. In lieu thereof, evidence of self-insurance in the amount of $115,000.00 must be filed with the Commissioner of Motor Vehicles and shall be maintained and evidenced in a form prescribed by the Commissioner. The Commissioner may adopt rules governing the standards for insurance identification cards. The Commissioner may also require that evidence of financial responsibility be produced before motor vehicle inspections are performed pursuant to the requirements of section 1222 of this title.

  (b) A person who violates subsection (a) of this section shall be assessed a civil penalty of not more than $500.00, and such violation shall be a traffic violation within the meaning of chapter 24 of this title.

  (c) Every operator of a vehicle required to be registered shall have proof of financial responsibility as required by subsection (a) of this section when operating a vehicle on the highways of this State. A person may prove financial responsibility using a portable electronic device; however, use of a device for this purpose does not in itself constitute consent for an enforcement officer to access other contents of the device. An operator cited for violating this subsection shall not be convicted if the operator sends or produces to the issuing enforcement agency within seven business days after the traffic stop proof of financial responsibility that was in effect at the time of the traffic stop.

  (d) A person who violates subsection (c) of this section shall be subject to a civil penalty of not more than $100.00. (Added 1985, No. 77, § 1, eff. Jan. 1, 1986; amended 1987, No. 163 (Adj. Sess.), eff. April 29, 1988; 1989, No. 84, § 5; 1997, No. 117, § 33, eff. Jan. 1, 1999; 2011, No. 46, § 6; 2013, No. 67, § 14; 2013, No. 189 (Adj. Sess.), § 13; 2015, No. 50, § 6; 2019, No. 14, § 62, eff. April 30, 2019; 2023, No. 85 (Adj. Sess.), § 279, eff. July 1, 2024.)

• § 801. Proof of financial responsibility required

  (a) The Commissioner shall require proof of financial responsibility to satisfy any claim for damages, by reason of personal injury to or the death of any person, of at least $25,000.00 for one person and $50,000.00 for two or more persons killed or injured and $10,000.00 for damages to property in any one crash, as follows:

  (1) From a person who is convicted of any of the following violations of this title:

  (A) Death resulting from:

  (i) careless and negligent operation of a motor vehicle; or

  (ii) reckless driving of a motor vehicle.

  (B) Any violation of section 1201 of this title or for any suspension pursuant to section 1205 of this title.

  (C) Failing to immediately stop and render such assistance as may be reasonably necessary following a crash resulting in injury to any person or property, other than the vehicle then under his or her control.

  (D) Operating, taking, using, or removing a motor vehicle without the consent of the owner in violation of section 1094 of this title.

  (E) Operating a motor vehicle after suspension, revocation, or refusal of a license, in violation of section 674 of this title.

  (F) [Repealed.]

  (G) [Repealed.]

  (H) The provisions of subdivisions (A), (C), (D), and (E) of this subdivision (a)(1) shall not apply to an operator furnishing the Commissioner with satisfactory proof that a standard provisions automobile liability insurance policy, issued by an insurance company authorized to transact business in this State insuring the operator against public liability and property damage, in the amounts required under this section with respect to proof of financial responsibility, was in effect at the time of the violation. Nor shall these provisions apply if the operator was a nonresident, holding a valid license issued by the state of his or her residence, at the time of the violation, and satisfactory proof, in the form of a certificate issued by an insurance company authorized to transact business in the state of his or her residence, and accompanied by a power of attorney authorizing the Commissioner to accept service on its behalf, of notice or process in any action arising out of the violation, certifying that insurance covering the legal liability of the operator to satisfy any claim or claims for damage to person or property, in an amount equal to the amounts required under this section with respect to proof of financial responsibility was in effect at the time of the violation.

  (2) From a person against whom there is an outstanding unsatisfied judgment of a court of competent jurisdiction within this State for damages arising out of a motor vehicle crash and based upon any violation of the provisions of this title.

  (3) From the operator of a motor vehicle involved in a crash that resulted in bodily injury or death to any person or property damage, including to the motor vehicle under the operator’s control, in an aggregate amount to the extent of $3,000.00 or more, excepting, however:

  (A) an operator furnishing the Commissioner with satisfactory proof that a standard provisions automobile liability insurance policy, issued by an insurance company authorized to transact business in this State insuring the person against public liability and property damage, in the amounts required under this section with respect to proof of financial responsibility, was in effect at the time of the crash; or

  (B) a nonresident operator holding a valid license issued by the state of his or her residence at the time of the crash who furnishes satisfactory proof, in the form of a certificate issued by an insurance company authorized to transact business in the state of his or her residence, when accompanied by a power of attorney authorizing the Commissioner to accept service on its behalf of notice or process in any action upon the policy arising out of the crash, certifying that insurance covering the legal liability of the operator to satisfy any claim or claims for damage to person or property, in an amount equal to the amounts required under this section with respect to proof of financial responsibility, was in effect at the time of the crash.

  (b) The provisions of subdivision (a)(3) of this section shall not apply to the operator of a motor vehicle, involved in a crash, if at the time of the crash the motor vehicle he or she was operating, whether attended or unattended, was legally parked in any location other than upon a public highway. Nor shall the provisions of that subdivision apply to the operator of an all-terrain vehicle when the vehicle is registered and operated pursuant to chapter 31 of this title.

  (c) In lieu of the insurance policy or surety bond required under this section, a person may qualify as a self-insurer by obtaining a certificate of self-insurance from the Commissioner, who may, in his or her discretion, upon the application of such person, issue said certificate of self-insurance, when he or she is satisfied that such person is possessed of a net unencumbered capital of at least $115,000.00. The Commissioner may require annual reports from any self-insurer, which reports must show at least $115,000.00 unencumbered net worth. Whenever the Commissioner finds that any self-insurer does not possess $115,000.00 of unencumbered net worth, he or she shall revoke the certificate of self-insurance. Failure to pay any judgment, within statutory limits, after such judgment shall have become final, shall constitute reasonable grounds for the cancellation of a certificate of self-insurance. A certificate of self-insurance obtained by a self-insurer shall insure every person operating a motor vehicle, owned by said self-insurer, with his or her express or implied permission, against loss within statutory limits from the liability imposed by law upon such person arising out of the operation of said motor vehicle and shall be for the benefit of any person suffering personal injuries or property damage arising out of the use of such motor vehicle with such express or implied permission.

  (d) Where erroneous information with respect to insurance coverage is furnished to the Commissioner by the operator involved in a crash, the Commissioner shall, after receipt by him or her of correct information with respect to such coverage, take appropriate action as provided in section 802 of this title.

  (e) Within 15 days after the receipt from the Commissioner of notice of claimed insurance coverage, the insurance carrier named by the operator shall notify the Commissioner in such manner as he or she may require in case the required insurance was not in effect at the time specified in the notice. If no such notification is received by the Commissioner within 15 days, the Commissioner may assume that the required insurance was in effect at the time specified in the notice. (Amended 1965, No. 4, § 1; 1969, No. 227 (Adj. Sess.), § 2, eff. May 1, 1970; 1971, No. 151 (Adj. Sess.), §§ 1, 2, eff. March 2, 1972; 1971, No. 258 (Adj. Sess.), § 6, eff. March 1, 1973; 1977, No. 81, § 4, eff. April 27, 1977; 1977, No. 220 (Adj. Sess.), §§ 1, 2; 1979, No. 190 (Adj. Sess.), § 3; 1979, No. 194 (Adj. Sess.), § 1; 1983, No. 61, § 1; 1983, No. 240 (Adj. Sess.), § 2; 1985, No. 230 (Adj. Sess.), § 3; 1995, No. 17, § 1; 1995, No. 67 (Adj. Sess.), § 1; 1997, No. 117 (Adj. Sess.), § 34, eff. April 29, 1998, and Jan. 1, 1999; 1999, No. 102 (Adj. Sess.), § 2; 1999, No. 160 (Adj. Sess.), § 14; 2011, No. 46, § 7; 2015, No. 23, § 122; 2015, No. 47, § 20; 2019, No. 131 (Adj. Sess.), § 164; 2019, No. 170 (Adj. Sess.), § 2, eff. Jan. 1, 2021.)

• § 802. Suspension of license

  (a) Proof of financial responsibility shall cover a person in the operation of any and all motor vehicles operated by him or her. If he or she fails to furnish such proof, when required under the provisions of section 801 of this title, within 20 days after notice from the Commissioner is mailed to him or her, until such proof is furnished, the Commissioner shall suspend the license of an operator or the right of an unlicensed operator or nonresident to operate any motor vehicle in this State.

  (b) [Repealed.]

  (c) When a resident of Vermont, or an individual holding a Vermont operator’s license, as a result of a motor vehicle crash in any other state has been required to furnish the other state with evidence of future financial responsibility and because of failure to do so the individual’s operating privilege has been suspended or revoked, upon being notified by the proper official of such other jurisdiction of the suspension or revocation, the Commissioner shall suspend the Vermont operator’s license or right of the individual to operate motor vehicles, and the suspension shall remain in effect until the individual furnishes the Commissioner with satisfactory evidence that the individual has complied with the requirement to furnish the other state with evidence of future financial responsibility.

  (d)-(h) [Repealed.]

  (i) No proof of financial responsibility shall be required, under subdivision 801(a)(3) of this title, and no license shall be suspended under that subdivision, unless the operator whose license or right to operate motor vehicles is subject to suspension has been afforded the opportunity of a hearing to determine whether the operator was, at the time of the crash, injury, or damage in question, insured against public liability and property damage in the amounts required under section 801 of this title with respect to proof of financial responsibility. If the operator requests a hearing, and appears at the time and place provided, the Commissioner or his or her appointed representative shall conduct a hearing, make findings, and render a decision. The hearing examiner may consider such evidence as is offered and may consider also the operator and investigating officer report or reports filed in connection with the crash, injury, or damages as well as the assumption permitted under subsection 801(e) of this title. If the decision of the hearing examiner finds the operator to be uninsured at the time of the crash, injury, or damages, then the person shall be required to provide proof of financial responsibility under this subchapter and, if he or she fails to do so, his or her license or right to operate a motor vehicle shall be suspended. A person found to be uninsured may have the finding reviewed in the Superior Court. The hearings provided for shall be conducted in Montpelier. Hearings shall be conducted with a minimum of procedural requirements, so as to provide persons an opportunity to be heard without delay and at reasonable expense to them and to the State. (Amended 1965, No. 4, § 2; 1971, No. 151 (Adj. Sess.), §§ 3, 4, eff. March 2, 1972; 1977, No. 175 (Adj. Sess.); 1977, No. 220 (Adj. Sess.), §§ 3, 4; 1979, No. 194 (Adj. Sess.), § 3, eff. May 6, 1980; 1983, No. 61, § 2; 1995, No. 67 (Adj. Sess.), § 2; 1997, No. 161 (Adj. Sess.), § 18, eff. Jan. 1, 1998; 2023, No. 85 (Adj. Sess.), § 280, eff. July 1, 2024.)

• § 803. Proof of financial responsibility to be kept in force

  After a person has been required to file proof of financial responsibility, he or she shall not thereafter be entitled to a renewal of his or her license, unless such proof or a renewal thereof is kept on file and in force, except as provided in section 809 of this title. Notwithstanding any other provision of this title, any person required to furnish proof of financial responsibility shall have his or her license or privilege to operate a motor vehicle suspended and shall surrender the license on the date that the insurance expires or is terminated. (Amended 1981, No. 180 (Adj. Sess.), § 2, eff. April 22, 1982.)

• § 804. Method of proof

  (a) Proof of financial responsibility shall be furnished by an insurance company authorized to do business in this State, in a form satisfactory to the Commissioner and shall be evidence of the insuring of such person against claims and judgments for personal injury and property damage in the amounts specified in section 801 of this title, provided the policy of insurance shall be noncancellable except after 15 days’ notice to the Commissioner; or such proof may be the bond of a surety company, authorized to transact business in this State, which bond shall be conditioned for the payment of such amounts. An insurance company or surety company issuing such policy or bond shall immediately furnish, for filing with the Commissioner, a satisfactory certificate certifying that such policy or bond has been issued. Instead of the certificate, proof may be furnished by any computer-generated means approved by the Commissioner. Once proof furnished in this manner is accepted by the Commissioner, the insurance company or surety company shall be bound in the same manner as if a certificate had been furnished for filing.

  (b) An insurance or surety company shall bear responsibility for its errors, including failure to file in a timely manner, in connection with the filing of the certificate referred to in subsection (a) of this section. All costs and expenses incurred by insureds and the Commissioner of Motor Vehicles as a consequence of the failure to file a properly executed certificate shall be paid by the insurance or surety company.

  (c) The Commissioner may require that an insurance or surety company appoint an in-state representative having authority to execute certificates on its behalf when an insurer fails to submit properly executed certificates.

  (d) If an insurer is not authorized to do business in this State, the Commissioner may accept a written certificate, provided that the certificate issued on behalf of an operator who is a nonresident of this State otherwise conforms with the provisions of this chapter and the insurer complies with the following conditions with respect to the policies certified:

  (1) the insurer executes a power of attorney authorizing the Commissioner to accept service on its behalf of notice or process in any action arising out of a motor vehicle crash in this State; and

  (2) the insurer agrees in writing that these policies shall be deemed to conform with the laws of this State.

  (e) If an insurer not authorized to transact business in this State but qualified to furnish proof defaults in any undertakings or agreements, the Commissioner shall not accept as proof any certificate of the insurer so long as the default continues. (Amended 1983, No. 101 (Adj. Sess.); 1987, No. 192 (Adj. Sess.), § 1; 1995, No. 67 (Adj. Sess.), § 3; 1997, No. 117 (Adj. Sess.), § 36, eff. Jan. 1, 1999.)

• § 805. Waiver of defenses against injured party

  When evidence of the insuring of a person, convicted of a violation of a motor vehicle law within the terms of this title, is offered as proof of financial responsibility, the presentation of such proof shall include certification that the policy of insurance or indemnity bond has a certificate waiving, as against injured persons, all defenses based on false representation or breach of warranties as set forth in the application for the policy of insurance or indemnity bond by the insured attached. Such contract, bond, or policy of insurance shall be for the benefit of a person injured in person or property, to the amounts indicated, to satisfy the legal liability of the insured. (Amended 2019, No. 131 (Adj. Sess.), § 165.)

• § 806. Additional evidence

  Additional evidence of financial responsibility shall be furnished to the Commissioner, at any time, upon the Commissioner’s request. (Amended 2023, No. 85 (Adj. Sess.), § 281, eff. July 1, 2024.)

• § 807. Bond

  The bond shall be held by the Commissioner to satisfy an execution issued against such person in a case arising out of damage caused by the operation of a motor vehicle owned by such person.

• § 808. Repealed. 2007, No. 61, § 6.

• § 809. Waiver of proof of financial responsibility

  (a) The Commissioner shall relieve an operator from the obligation to furnish proof of financial responsibility after one year from the crash, conviction, or judgment giving rise to the obligation. In the event that a suspension or revocation resulted from the conviction giving rise to the obligation, an operator shall not be relieved of the obligation to furnish proof of financial responsibility until one year after his or her reinstatement eligibility date.

  (b) Notwithstanding subsection (a) of this section, the Commissioner shall not relieve an operator from the obligation to furnish proof of financial responsibility until three years after a conviction of careless and negligent operation of a motor vehicle resulting in death, conviction of reckless driving of a motor vehicle resulting in death, or second and subsequent conviction of a violation of section 1201 of this title. In the event that a suspension resulted from the conviction giving rise to the obligation, an operator shall not be relieved of the obligation to furnish proof of financial responsibility until three years after his or her reinstatement eligibility date.

  (c) This section shall not be construed to relieve an operator of his or her responsibility to comply with the mandatory insurance requirement set forth in section 800 of this title. (Amended 1965, no. 69, eff. May 19, 1965; 1977, No. 220 (Adj. Sess.), § 4; 1979, No. 194 (Adj. Sess.), § 4, eff. Jan 1, 1981; 1983, No. 138 (Adj. Sess.), eff. April 7, 1984; 1987, No. 192 (Adj. Sess.), § 2; 1993, No. 17, § 1, eff. Jan. 1, 1994; 2019, No. 170 (Adj. Sess.), § 3, eff. Jan. 1, 2021.)

• § 810. Uncompensated victims; reporting requirements

  The Commissioner of Financial Regulation, with cooperation of the Commissioner of Motor Vehicles and the Commissioner of Public Safety, shall direct any company issuing policies in this State insuring against liability arising out of the maintenance, ownership, or use of any motor vehicle to provide such information, reports, and data as the Commissioner determines will reasonably identify the number and characteristics of uninsured motorists and uncompensated victims of automobile crashes in the State in order to recommend policies designed to further reduce the numbers of uncompensated victims of motor vehicle crashes. As a condition of conducting business in the State, any company writing such policies shall comply with the directives of the Commissioner. (Added 1985, No. 77, § 5; amended 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2.)

• Subchapter 002: JITNEYS

• § 841. Compulsory liability insurance or a surety bond

  Before a jitney is used in the carrying of passengers for hire, the owner thereof shall procure a contract or policy of insurance issued by a liability insurance company authorized to transact business in this State, or a surety bond executed by such owner and having a surety company authorized to transact business in this State as surety thereon, which insurance or surety bond shall indemnify the insured against any legal liability to the passengers in the jitney or others, for personal injury, the death of a person, or property damage, which injury, death, or damage may result from or have been caused by the use or operation of a motor vehicle covered by such policy of insurance or such bond.

• § 842. Insurer or surety as co-defendant

  The insurer or surety may be made co-defendant with the owner of such jitney in an action for such injury, death, or property damage.

• § 843. Amount of insurance or bond

  The amount of insurance or bond shall be a minimum of $50,000.00 for injury to or death of any one person in any crash subject to a minimum limit per crash of $100,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity of seven passengers or less, subject to a minimum limit per crash of $250,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity from eight to 12 passengers inclusive, subject to a minimum limit per crash of $300,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity from 13 to 20 passengers inclusive, subject to a minimum limit per crash of $350,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity from 21 to 30 passengers inclusive, subject to a minimum limit per crash of $300,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity exceeding 30 passengers, and $50,000.00 from damages to property in any crash. (Amended 1965, No. 109, § 1; 1981, No. 136 (Adj. Sess.), § 2, eff. Jan. 1, 1983.)

• §§ 844-848. Repealed. 1995, No. 112 (Adj. Sess.), § 16.

• Subchapter 003: MOTOR BUSES

• § 881. Compulsory liability insurance or bond

  The Commissioner shall not register a motor bus, and a person shall not operate or cause to be operated upon any public highway a motor bus, until the owner thereof has procured insurance or a bond having a surety company authorized to transact business in this State as surety thereon. The insurance or surety bond shall indemnify the insured against any legal liability for personal injury or the death of any person or property damage, which injury, death, or damage results from or is caused by the use or operation of the motor bus described in the contract of insurance or such bond. (Amended 2015, No. 47, § 22.)

• § 882. Insurer or surety as co-defendant

  The insurer or surety may be made a co-defendant with the owner of such motor bus in an action for such injury, death, or property damage.

• § 883. Amount of insurance or bond

  The amount of insurance or of such bond that an owner of a motor bus shall carry as insurance or indemnity against claims for personal injury, death, or property damage shall be determined by the Transportation Board. Such policy or bond shall also indemnify the insured against legal liability resulting from damage to property to the amount of $2,000.00. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2015, No. 47, § 23.)

• § 884. Proof of insurance; notice of cancellation

  A company issuing such insurance or indemnity bond shall file with the Commissioner proof that the required insurance or indemnity bond has been issued as shall be satisfactory to the Commissioner and such insurance or bond shall not lapse, expire, or be cancelled while the registration is in force until at least 20 days’ written notice of an intention to cancel has been given to the Commissioner. Upon receipt of the notice, the Commissioner shall immediately notify the insured of such intention to cancel and that if other insurance or indemnity bond is not furnished within 15 days thereafter, the registration of the motor buses of the insured shall be cancelled and the number plates of such motor buses will be taken up by the Commissioner. (Amended 2019, No. 131 (Adj. Sess.), § 166.)

• § 885. Waiver of defenses against injured party

  When evidence of insurance is offered to the Commissioner that a contract or policy of insurance issued by a liability insurance company or a surety bond has been procured in accordance with the provisions of section 881 of this title, the presentation of such proof shall include certification that the policy of insurance or bond includes or has appended a certificate waiving, as against injured persons, all defenses based on false representations or breach of warranties as set forth in the application for the policy of liability insurance or indemnity bond by the insured. Such contract or policy of insurance or surety bond shall be for the benefit of a person injured in person or property, to the amounts indicated, to satisfy the legal liability of the insured. (Amended 2019, No. 131 (Adj. Sess.), § 167.)

• § 886. Injured person may obtain name and description of insurer

  A person injured in person or property by a motor bus may apply to the Commissioner for the name and description of the insurer of the motor bus causing such injury or the name of the surety upon any indemnity bond or the owner thereof.

• § 887. Penalties

  A person who violates a provision of sections 881-886 of this title shall be fined not more than $500.00 or imprisoned not more than one year, or both.

• § 888. Alternative form of security

  In lieu of all or part of the insurance or bond required by section 881 of this title, a motor bus owner may file with the Commissioner a bond conditioned for the payment and discharge of all liability described in section 881 of this title provided the policy of insurance, if any, or bond is approved by an order of the Transportation Board filed with the Commissioner determining the amount, if any, of insurance to be procured and the amount of a bond in addition to or in substitution for insurance. The Board may approve a bond without surety if it determines, by order made upon proper showing, that a surety on the bond is not required by the public interest because of the proven financial responsibility of the obligor, or because of collateral security consisting of deposits in a Vermont bank or negotiable securities held by such bank as trustee, or a combination thereof, pledged to secure the performance of the bond upon terms and conditions prescribed by the Board. If the order requires insurance or a surety bond, the policy of insurance or surety bond shall be executed by a company authorized to do business in this State. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 2015, No. 47, § 24; 2019, No. 131 (Adj. Sess.), § 168.)

• Subchapter 004: SCHOOL BUSES

• § 921. Liability insurance

  A motor vehicle owned or hired by a board of school directors shall not be operated in the transportation of schoolchildren at any time when the owner and operator thereof is not insured under a liability policy issued by an insurance company authorized to transact business in this State to indemnify against liability for damages for personal injuries or damages to property. The amount of insurance shall be a minimum of $100,000.00 for injury to or death of any one person in any crash, subject to a minimum limit per crash of $300,000.00 for injuries to or death of all persons in any one crash if the vehicle has a seating capacity of nine passengers or less. If the vehicle has a seating capacity in excess of nine passengers, the amount of insurance shall be a minimum of $300,000.00 for injury to or death of any one person in any crash and subject to a minimum limit per crash of $500,000.00 for injuries to or death of all persons in any one crash. In addition, a minimum limit of $50,000.00 per occurrence for property damage shall be required. It shall be the duty of the school directors to require the filing, by or with them, of proof that the insurance is in force prior to the opening of each school year and that it is kept in force so long as schoolchildren are being transported. A person who violates a provision of this section shall be fined not more than $500.00 or imprisoned not more than six months, or both. This section shall not apply to any person who transports only his or her own children, whether with or without compensation. (Amended 1965, No. 109, § 2; 1975, No. 149 (Adj. Sess.), § 2.)

• Subchapter 005: INSURANCE AGAINST UNINSURED, UNDERINSURED, OR UNKNOWN MOTORISTS

• § 941. Insurance against uninsured, underinsured, or unknown motorists

  (a) No policy insuring against liability arising out of the ownership, maintenance, or use of any motor vehicle may be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State unless coverage is provided for the protection of persons insured under the policy or a supplemental policy who are legally entitled to recover damages, from owners or operators of uninsured, underinsured, or hit-and-run motor vehicles, for bodily injury, sickness, or disease, including death, and for property damages resulting from the ownership, maintenance, or use of such uninsured, underinsured, or hit-and-run motor vehicle. The coverage for property damages shall be sufficient to indemnify a claim for damages to which the claimant is legally entitled of no more than $10,000.00 per claim, subject to a $150.00 deductible; provided, however, to the extent that other direct damage coverage is valid and collectible:

  (1) this deductible shall not apply to a claimant who is otherwise insured for direct damages to his or her motor vehicle, in which case:

  (A) the coverage for property damages provided in this section shall be applied, without deductible, to pay the deductible of the other direct damage coverage; and

  (B) the balance of the direct damage claim, if any, shall be covered by such other direct damages coverage to the extent of its limits;

  (2) further, any other claim for property damages, not direct damages, to which the claimant is legally entitled, shall be paid by the coverage required by this section, without deductible, to the extent of the limits provided in this section.

  (b) Every policy insuring against liability arising out of the ownership, maintenance, or use of any motor vehicle shall provide insurance against loss resulting from the liability imposed by law for damages because of bodily injury or death of any person within this State or elsewhere in the United States and Canada.

  (c) The coverages under subsections (a) and (b) of this section for new or renewed policies shall be not less than $50,000.00 for one person and $100,000.00 for two or more persons killed or injured. If the limits of liability coverage in the policy are greater than $50,000.00 for one person and $100,000.00 for two or more persons injured or killed, the limits of uninsured motorist insurance shall be the same, unless the policyholder otherwise directs.

  (d) For the purpose of this subchapter, an “uninsured motor vehicle” includes an insured other motor vehicle where:

  (1) the liability insurer of the other motor vehicle is unable, because of its insolvency, to make payment with respect to the legal liability of its insured within the limits specified in its policy;

  (2) the occurrence out of which the legal liability arose took place while the uninsured vehicle coverage required under subsection (a) of this section was in effect; and

  (3) the insolvency of the liability insurer of the other motor vehicle existed at the time of, or within one year after, the occurrence.

  (e) If payment is made under uninsured motorist coverage, and subject to the terms of that coverage, to the extent of that payment, the insurer is entitled to the proceeds of any settlement or recovery from any person legally responsible for the damage or personal injury, as to which the payment was made, and to amounts recoverable from the assets of an insolvent insurer of such person. However, if the injured party settles or recovers against any person, any reimbursement due to an insurer under this section shall be reduced by deducting a fair portion of all reasonable expenses of recovery incurred in effecting the settlement or recovery. The expenses of recovery shall be apportioned between the parties as their interests appear at the time of the settlement or recovery.

  (f) For the purpose of this subchapter, a motor vehicle is underinsured to the extent that:

  (1) the liability insurance limits applicable at the time of the crash are less than the limits of the uninsured motorist coverage applicable to the insured; or

  (2) the available liability insurance has been reduced by payments to others injured in the crash to an amount less than the limits of the uninsured motorist coverage applicable to the insured.

  (g) Within 30 days after receipt of a written request by a person reasonably claiming the right to recover damages after a crash involving owners or operators of motor vehicles for bodily injury, sickness, or disease, including death, or for property damages resulting from the ownership, maintenance, or use of a motor vehicle, an insurer that may be liable to satisfy part or all of the claim under a policy subject to this chapter shall provide a statement, by a duly authorized agent of the insurer, setting forth the names of the insurer and insured, and the limits of liability coverage. (Added 1967, No. 374 (Adj. Sess.), § 1; amended 1979, No. 194 (Adj. Sess.), § 2, eff. Jan. 1, 1981; 1983, No. 61, § 3; 1985, No. 77, § 3; 1997, No. 117 (Adj. Sess.), §§ 35, 37, eff. Jan. 1, 1999; 2005, No. 9, § 1, eff. May 27, 2005; 2019, No. 131 (Adj. Sess.), § 169; 2021, No. 105 (Adj. Sess.), § 416, eff. July 1, 2022; 2023, No. 85 (Adj. Sess.), § 282, eff. July 1, 2024.)

• § 942. Binders and renewal endorsements; binders of insurance

  An insurer authorized to issue automobile liability insurance may issue a binder, in lieu of a policy, and issue a renewal endorsement or evidence of renewal of an existing policy. Renewal endorsements and binders shall be deemed to include provisions in accordance with this subchapter and rules adopted in furtherance thereof. (Added 1967, No. 374 (Adj. Sess.), § 2; amended 2019, No. 131 (Adj. Sess.), § 170.)

• § 943. Provisions in insurance policies

  All policies of motor vehicle liability insurance delivered or issued for delivery in this State shall be deemed to include provisions in accordance with this subchapter and rules adopted in furtherance thereof. (Added 1967, No. 374 (Adj. Sess.), § 3; amended 2019, No. 131 (Adj. Sess.), § 171.)