A new law taking effect next month will require $5 million automobile liability insurance on vehicles capable of carrying 15 passengers or more. The law does not appear to permit a combination of primary and excess insurance to meet the requirement. If you insure these types of vehicles, you should check now with your commercial auto carriers to find out whether they can offer these limits.
Connecticut Public Act 21-106, which Gov. Ned Lamont signed on June 30 after approval by the legislature earlier in the month, revised several state motor vehicle statutes. Section 8 of the Act takes effect on Oct. 1, 2021 and addresses insurance requirements for public and school buses, taxicabs, livery and similar vehicles. Subsection (b) requires the amount of insurance applicable to bodily injury and property damage liability to be "five million dollars, if such vehicle is operated in livery service ... and designed or used to transport fifteen passengers or more." It applies the same limit requirement to vehicles designed or used to transport 15 passengers or more without compensation.
In addition, subsection (c)(2) of Section 8 states, "No person or company issuing any such insurance ... shall issue an insurance policy ... for a motor vehicle specified in subsection (a) of this section for limits less than those specified in subsection (b) of this section." [Emphasis added]. We interpret this to mean that the $5 million limit must be provided by a single primary auto liability insurance policy and not by a combination of primary and excess coverage. We have learned that at least one major insurance carrier agrees with our interpretation and intends to non-renew policies covering these vehicles because they will not offer a primary limit that high.
Please be aware that this new requirement will take effect in just over three weeks. We urge you to check with your carriers to find out what their capacities are. In the meantime, we are working to see if the requirement can be softened to allow umbrella policies to contribute. We will provide more information as it becomes available.
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