Section 113A: Motor vehicle liability policies; contents; commissioner's approval; options to purchase policies or bonds; notice of reduced or eliminated coverages
Section 113A. No motor vehicle liability policy as defined in section thirty-four A of chapter ninety shall be issued or delivered in the commonwealth until a copy of the form of the policy has been on file with the commissioner for at least thirty days, unless before the expiration of said period the commissioner shall have approved the form of the policy in writing, nor if the commissioner notifies the company in writing that in his opinion the form of said policy does not comply with the laws of the commonwealth, specifying his reasons therefor, provided that he shall notify the company in writing within said period of his approval or disapproval thereof, and provided, further, that such action of the commissioner shall be subject to review by the supreme judicial court; nor if it contains any exceptions or exclusions as to specified accidents or injuries or causes thereof; nor unless it contains in substance the following provisions:—
(1) That the policy be subject to the provisions of sections one hundred and twelve and one hundred and thirteen, as respects both the owner of a motor vehicle or trailer insured thereunder and any person responsible for its operation with the express or implied consent of such owner.
(2) That, except as otherwise provided in provision (2)A and in section one hundred and thirteen D, no cancellation of the policy, whether by the company or by the insured, shall be valid unless written notice thereof is given by the party proposing cancellation to the other party giving the specific reason or reasons for such cancellation at least twenty days in each case prior to the intended effective date thereof, which date shall be expressed in said notice, and that such notice of cancellation sent by the company to the insured and return premium, if any, shall be delivered in hand to the named insured, or be left at his last address, at his last business, residence or other address known to the company, or be forwarded to said address by first class mail, postage prepaid, and a notice left or forwarded, as aforesaid, shall be deemed a sufficient notice. No written notice of cancellation shall be deemed effective when mailed by the company unless the company obtains a certificate of mailing receipt from the United States Postal Service showing the name and address of the insured stated in the policy. Furthermore, an affidavit of any officer, agent or employee of the company, duly authorized for the purpose, that he has so sent such notice addressed as aforesaid shall be prima facie evidence of the sending thereof as aforesaid; together with a provision that, in the event of a cancellation by the insured, he shall, if he has paid the premium on the policy to the company or to its agent who issued the policy, or to the duly licensed insurance broker, if any, by whom the policy was negotiated be entitled to receive a return premium after deducting the monthly short rates as determined by the commissioner for the time the policy shall have been in force, or in the event of cancellation by the company, the insured shall, if he has paid the premium as aforesaid, be entitled to receive a return premium calculated on a pro rata basis; provided, however, that if the insured after the sending of a notice of cancellation by the company, or after giving such notice to the company, files a new certificate under section thirty-four H of chapter ninety prior to the intended effective date of such cancellation, the filing of said certificate shall operate to terminate the policy on the date of said filing, and the return premium, if any, payable to the insured shall be computed as of the date of said filing, instead of the intended effective date of cancellation expressed in the notice thereof; provided, further, that if the final effective date of a cancellation by the company is fixed by an order of the board of appeal on motor vehicle liability policies and bonds or of the superior court, or a justice thereof, as provided in section one hundred and thirteen D, the return premium, if any, payable to the insured shall be computed as of the final effective date; and provided, further, that said cancellation shall not become effective unless the company or an insurance premium finance agency licensed under the provisions of chapter two hundred and fifty-five C has, immediately upon the intended effective date of the cancellation of the policy, whether proposed by the company or by the insured, forwarded to the registrar of motor vehicles a notice, in such form as he may prescribe, containing such information to apprise the registrar of the particular motor vehicle registration on which the insurance is intended to be cancelled. If the reason for cancellation is for nonpayment of premium, the notice of cancellation provided for in this provision shall state the amount of the deficiency of the premium owed the company for all the insurance provided and shall state in substance that the cancellation will not be effective if the insured pays the full amount of such deficiency on or prior to the effective date of the cancellation. The fact that an insurance agent or broker has paid the full premium to the company but has himself not been paid by the insured shall not operate to prevent cancellation for nonpayment of premium.
(2) A. That the policy shall terminate upon a sale or transfer by the owner thereof of the motor vehicle or trailer covered thereby, or upon his surrender to the registrar of motor vehicles of the registration plates issued to him by said registrar under chapter ninety with a written statement, in such form as the said registrar may require, that they are surrendered to cancel the registration of such motor vehicle or trailer and the policy, or upon the filing of a certificate as defined in section thirty-four A of chapter ninety of another company covering the same motor vehicle or trailer, and that upon a termination of the policy as aforesaid, the insured shall, if he has paid the premium on the policy as provided in provision (2), be entitled to receive a return premium computed as in the case of a cancellation of the policy by the insured under said provision (2).
The company shall not issue a return premium upon cancellation of the policy until the insured has presented to the company a receipt or other document showing that the number plates assigned to the insured motor vehicle have been returned to the registry of motor vehicles; provided however, that a company shall return a premium upon cancellation of the policy to an agent or broker or premium finance company without said receipt.
(3) That if the company shall cease for any reason to be authorized to transact business in the commonwealth the insured shall, if he has paid the premium as aforesaid, be entitled to a return premium calculated on a pro rata basis as of the effective date of the new certificate, if any, filed by him under said section thirty-four H, or, if no certificate is filed as aforesaid, as of the effective date of the revocation under said section thirty-four H of the registration of the motor vehicle or trailer covered by the policy.
(4) That the policy, the written application therefor, if any, and any rider or endorsement, which shall not conflict with the provisions of this chapter or said section thirty-four A, shall constitute the entire contract between the parties.
(5) That no statement made by the insured or on his behalf, either in securing the policy or in securing registration of the motor vehicle or trailer covered thereby, no violation of the terms of the policy and no act or default of the insured, either prior or subsequent to the issue of the policy, shall operate to defeat or avoid the policy so as to bar recovery within the limit provided in the policy by a judgment creditor proceeding under the provisions of said section one hundred and thirteen and clause (9) of section three of chapter two hundred and fourteen.
(6) That if, because of the insolvency or bankruptcy of the insured under the policy, he loses his right to possession of the motor vehicle or trailer covered thereby within the policy period, the policy shall cover the legal representative of his estate during the unexpired portion of such period to the same extent as though such representative were named as insured in the policy; and that in the case of the death of the insured, provided the motor vehicle is properly registered, the policy, unless cancelled, shall, pending the appointment of a legal representative of the estate of the deceased insured, but in no event beyond the date of expiration of the policy, cover any person who is related by blood or marriage to the deceased and has proper temporary custody of such motor vehicle or trailer, to the same extent as though he were named as the insured in the policy; and that, if such legal representative is appointed, the policy shall, subject to the above conditions and restrictions, cover such legal representative to the same extent as though he were named as the insured in the policy. Nothing herein contained shall operate to nullify any cancellation proceedings which have been commenced prior to the death of the insured.
Notwithstanding the foregoing provisions, a policy covering a registered motor vehicle or trailer which is being transferred as provided in section 2 of chapter 90 shall continue in force and cover a newly acquired new motor vehicle or trailer or a newly acquired used motor vehicle or trailer for a period beginning from the date of transfer of the registered motor vehicle or trailer until five o'clock post meridian of the seventh calendar day following the date of transfer within the period for which the transferred motor vehicle or trailer was registered; provided, however, that the number plates issued upon registration of the transferred motor vehicle or trailer shall be attached to the newly acquired vehicle.
Any such motor vehicle liability policy shall be deemed to contain any such provision in substance when in the opinion of the commissioner the provision is stated in terms more favorable to the insured or to a judgment creditor than herein set forth, and such policy may contain such other provisions not inconsistent with this chapter or said section thirty-four A as may be approved by the commissioner.
Motor vehicle liability policies may be issued, subject to the provisions of section thirty-four C of said chapter ninety, covering more than one motor vehicle or trailer.
Any company authorized to issue motor vehicle liability policies, as defined in said section thirty-four A, may, pending the issue of such a policy, execute an agreement, to be known as a binder, which shall during such time provide indemnity or protection in like manner and to the same extent as such a policy. The provisions of this section shall apply to such binders, except that provisions numbered (1) to (6), inclusive, need not be expressly stated therein but may be incorporated by reference in a manner approved by the commissioner, and the provisions of sections one hundred and thirteen B and one hundred and thirteen D relative to such motor vehicle liability policies shall likewise apply to such binders.
The provisions of this section, except provisions numbered (1), (4) and (5), shall apply to motor vehicle liability bonds as defined in said section thirty-four A, and every such bond shall contain a provision that no statement made by the principal on such bond or on his behalf either in securing the bond or in securing registration of the motor vehicle or trailer covered thereby, and no violation of the terms of the bond and no act or default of the principal, either prior or subsequent to the execution of the bond, shall operate to defeat or avoid such bond as against a judgment creditor of such principal or of a person responsible for the operation of the principal's motor vehicle or trailer with his express or implied consent.
The insured shall have the option to purchase and the insurer shall not refuse to issue an annual motor vehicle policy or bond providing coverages in accordance with this chapter and chapter ninety containing any expiration date as the insured may elect. Insurers may offer such policies or bonds for a period of more than one year but not more than two years or may issue an extension of any existing policy or bond.
For policies insuring motorcycles, trailers and other recreational type vehicles, insurers shall, at the option of the insured, issue a policy for a period of less than one year to be coterminous with the registration, using the appropriate short rate table to determine the premium.
In the event a company or filing or rating organization eliminates or reduces certain coverages, conditions, or definitions in such policies issued under this section, the company must attach to each of such policy a printed notice setting forth what coverages, conditions or definitions have been eliminated or reduced. If explanations of such reductions or eliminated coverages are not contained in such a printed notice attached to such policy, then such coverages, conditions or definitions shall remain in full force and effect without such reductions and eliminations.