Opinion ID: 2624117
Heading Depth: 3
Heading Rank: 4

Heading: Placing financial responsibility on insurers, for the narrow category of accidents within the assigned claims mechanism, comports with public policy.

Text: Finally, First Insurance makes the following public policy argument: [I]f [Willis] had been injured by a[UM] while operating her own vehicle, there is absolutely no question that she would not be entitled to Assigned Claims [BI] coverage and that her sole recovery, if any, would be based on whether or not she had [UM] coverage under her own Certificate Policy with First Insurance. Why should [Willis] be treated any differently . . . due to the fortuitous circumstance of having been injured while she was a passenger in another person's vehicle? Stated differently, why should [Willis] be relieved of the consequences of choosing not to purchase [UM] coverage simply because she was riding as a passenger in someone else's vehicle at the time she sustained injury? . . . . . . . [T]he interpretation of [HRS § 431:10C-408, see supra note 2,] argued for by [Willis] . . . would serve to create universal [UM] coverage for anyone injured in a motor vehicle accident. If Assigned Claims coverage was truly meant to apply to anyone for whom there is no [UM] coverage, then the Assigned Claims Program would make basic [UM] coverage . . . completely unnecessary and superfluous. There would be no point in paying a premium for [UM] coverage if all one had to do was apply to the [JUPB] and request that [one's BI] claim be assigned to a participating insurance carrier . . . at no cost. (Some emphases added and some in original.) (Citing Bowers v. Alamo Rent-A-Car, Inc., 88 Hawai`i 274, 965 P.2d 1274 (1998).) First Insurance distorts Willis's characterization of the assigned claims program by implying that it would create universal [UM] coverage for anyone injured in a motor vehicle accident (emphasis added). First Insurance overlooks HRS § 431:10C-408(b), which disqualifie[s], for example, a claimant who actually owns or is the registrant of one of the motor vehicles (2) . . . (A) . . . involve[d] in the accident. In other words, UM coverage, far from superfluous, protects car owners while driving or riding in their own vehicles and, hence, is far broader than the assigned claim system, which applies only in residual situations, see UMVARA § 19 cmt., 14 U.L.A. 85 (2005 & Supp. 2006). The absurd consequence of First Insurance's proposition would be that insurers, merely by offering, could compel even people who do not own cars to purchase passenger UM insurance and pedestrian UM insurance to hedge against the risk of injury by an impecunious and uninsured or underinsured driver or in a hit-and-run collision. Even one who does happen to own a motor vehicle but never drives it (such as a parent of a teenage driver) could be hamstrung by an insurer's mere offer into paying a monthly premium to avoid a financial catastrophe from an injury outside the confines of the car. In short, Willis should be treated . . . differently, as the legislature made clear by excluding from assigned coverage (1) [t]he owner or registrant of an involve[d] vehicle and (2) the knowing passenger of an uninsured vehicle but not (3) the injured passenger of a vehicle that later turns out to be uninsured.