Section 32-7-22

Motor vehicle liability policy defined; policy provisions.

(a) A motor vehicle liability policy, as the term is used in this chapter, means an owner's or an operator's policy of liability insurance, certified as provided in Section 32-7-20 or Section 32-7-21 as proof of financial responsibility, and issued, except as otherwise provided in Section 32-7-21, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named in the policy as insured.

(b) The owner's policy of liability insurance:

(1) Shall designate by explicit description or by appropriate reference all motor vehicles to be insured; and

(2) Shall insure the person named in the policy and any other person, as insured, using any motor vehicle or motor vehicles designated in the policy with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such motor vehicle, in the amount of not less than the minimum amounts set for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.

(c) The operator's policy of liability insurance shall insure the person named as insured in the policy against loss from the liability imposed upon him or her by law for damages arising out of the use by him or her of any motor vehicle not owned by him or her, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.

(d) The motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged for the policy, the policy period, and the limits of liability and shall contain an agreement or be endorsed that insurance is provided under the policy in accordance with the coverage defined in this chapter for bodily injury and death or property damage, or both, and is subject to all the provisions of this chapter.

(e) The motor vehicle liability policy need not insure any liability under any workers' compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance, or repair of any motor vehicle nor any liability for damage to property owned by, rented to, in charge of or transported by the insured.

(f) Every motor vehicle liability policy shall be subject to the following provisions which need not be contained in the policy:

(1) The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by the motor vehicle liability policy occurs. The policy may not be cancelled or annulled as to that liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage. Any statement made by the insured or on his or her behalf and any violation of the policy shall not defeat or void the policy.

(2) The satisfaction by the insured of a judgment for injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to make payment on account of injury or damage.

(3) The insurance carrier shall have the right to settle any claim covered by the policy, and if the settlement is made in good faith, the amount of the settlement shall be deductible from the limits of liability specified in subdivision (2) of subsection (b) of this section.

(4) The policy, the written application for the policy, if any, and any rider or endorsement which does not conflict with this chapter shall constitute the entire contract between the parties.

(g) Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy, and the excess or additional coverage shall not be subject to this chapter. With respect to a policy which grants any excess or additional coverage, the term "motor vehicle liability policy" shall apply only to that part of the coverage which is required by this section.

(h) Any motor vehicle liability policy may provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for this chapter.

(i) Any motor vehicle liability policy may provide for the prorating of the insurance by its terms with other valid and collectible insurance.

(j) The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet the requirements for a policy.

(k) Any binder issued pending the issuance of a motor vehicle liability policy shall be deemed to fulfill the requirements for a policy.

(Acts 1951, No. 704, p. 1224, §21; Acts 1993, 1st Ex. Sess., No. 93-903, p. 192, §3; Act 2008-393, p. 754, §1; Act 2011-688, p. 2076, §1.)