44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO MOTOR VEHICLE INSURANCE; ENACTING THE MOTOR VEHICLE INSURANCE RESPONSIBILITY ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Motor Vehicle Insurance Responsibility Act".

Section 2. LEGISLATIVE FINDINGS--PURPOSE.--

A. The legislature finds that:

(1) an insured motorist has little hope of recovering damages from an uninsured motorist who has been found to be liable for damages;

(2) an uninsured injured person may make a claim against an insured person with confidence that the uninsured person will recover some damages if liability is established against the insured person;

(3) uninsured persons may take advantage of a compensation structure to which they do not contribute;

(4) the cost of uninsured motor vehicle insurance is increasing; and

(5) persons driving under the influence of intoxicating liquor or drugs put a greater burden on financially responsible motorists through increasing insurance costs and injuries.

B. The purpose of the Motor Vehicle Insurance Responsibility Act is to:

(1) improve the fairness of the motor vehicle liability insurance system;

(2) avoid ineffective or cumbersome proposals to increase compliance with the Mandatory Financial Responsibility Act; and

(3) reduce motor vehicle insurance costs.

Section 3. DEFINITIONS.--As used in the Motor Vehicle Insurance Responsibility Act:

A. "convicted" means that the alleged violator has entered a plea of guilty or nolo contendere or has been found guilty in the trial court and has waived or exhausted all of his rights to an appeal;

B. "driving under the influence of intoxicating liquor or drugs" means driving under the influence of intoxicating liquor or drugs as used in Chapter 66, Article 8 NMSA 1978;

C. "felony" means "felony" as defined in the Criminal Code; and

D. "noneconomic loss" means a loss other than pecuniary loss or monetary expense incurred by or on behalf of an injured person in connection with the operation or use of a motor vehicle and includes loss associated with pain, suffering, mental anguish, emotional distress or diminished enjoyment of life.

Section 4. LIMITATIONS ON RECOVERY OF NONECONOMIC LOSS--EXCEPTIONS.--

A. Except as provided in this section, no injured person may recover for noneconomic loss in a legal action to recover damages arising from an accident resulting from the operation or use of a motor vehicle, if the injured person is:

(1) the operator of the motor vehicle involved in the accident and is convicted of driving under the influence of intoxicating liquor or drugs at the time of the accident;

(2) an owner of a motor vehicle involved in the accident and fails to produce proof of financial responsibility pursuant to the Mandatory Financial Responsibility Act;

(3) the operator of a motor vehicle involved in an accident and is operating the motor vehicle in violation of the Mandatory Financial Responsibility Act;

(4) the operator of a motor vehicle involved in an accident and is operating the motor vehicle with a suspended or revoked license at the time of the accident; or

(5) at the time of the accident, injured in the course of committing a felony or fleeing from the crime scene and is convicted of that felony.

B. An injured person may recover for noneconomic loss in a legal action to recover damages arising from the operation of a motor vehicle involved in an accident if the accident was caused by the willful and wanton act of a motorist or the injured person is a person described in Paragraph (2), (3) or (4) of Subsection A of this section who is:

(1) injured by a motorist who is convicted of driving under the influence of intoxicating liquor or drugs at the time of the accident; or

(2) injured by a motorist, passenger in the motor vehicle or pedestrian who was, at the time of the accident, in the course of committing a felony or fleeing from the crime scene and is convicted of that felony.

Section 5. LIMITATIONS ON INSURANCE COVERAGE.--An insurer is not liable to pay for damages to an injured person for noneconomic loss if the injured person has been denied recovery pursuant to the Motor Vehicle Insurance Responsibility Act.

Section 6. PROCEDURE FOR PENDING CLAIMS.--

A. If an injured person has been charged in connection with the accident with driving under the influence of intoxicating liquor or drugs or the commission of a felony and a final judgment has not been made, an insurer may advise the injured person that settlement of the claim will be suspended until a final judgment is rendered. The injured person claiming damages shall provide evidence of the final disposition of charges.

B. No insurer shall be liable for unfair claims practices pursuant to Section 59A-16-20 NMSA 1978 nor shall any cause of action accrue against the insurer until the injured party provides the evidence to the insurer, who may then take reasonable steps to verify the validity of the evidence, including verifying insurance coverage by other insurers.

Section 7. RATE FILING.--Insurers shall file with the insurance division of the public regulation commission anticipated rates resulting from lower claim costs due to the Motor Vehicle Insurance Responsibility Act no later than August 1, 1999.

Section 8. ACT NOT SEVERABLE.--If any part or application of the Motor Vehicle Insurance Responsibility Act is held invalid, the remainder or its application to other situations or persons shall likewise be invalid. The provisions of this act are not severable.

Section 9. APPLICABILITY.--The provisions of the Motor Vehicle Insurance Responsibility Act apply to motor vehicle accidents occurring on or after October 1, 1999.