Hawaii Statute of Limitations for Vehicle Accidents
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The Hawaii Statute of Limitations provides that one cannot bring a lawsuit on any contract for car insurance benefits or any contract for optional additional coverage more than two years after the day of the car accident, two years after the last payment of motor vehicle insurance benefits, two years after a final order in arbitration has been entered, two years after a final judgment has been entered (or dismissal with prejudice of a tort action arising from a car accident, where a cause of action for insurance bad faith arises), or two years after the payment of benefits for liability coverage for underinsured motorist benefits.
The Hawaii Supreme Court has held that this same two-year statute of limitations deadline also applies to uninsured motorist claims. It also has held that a claim for UM benefits, which was made within the two-year statute of limitations time period, tolls the statute of limitations until the claim is denied. The insurance contract will determine what constitutes a claim for UM benefits.
The Intermediate Court of Appeals has held that a tort lawsuit that was filed more than two years after the last no-fault payment, but less than the two years after the last payment of UM benefits, was not filed late. The ICA has ruled that UM benefits are optional additional benefits so that statute that states that a car accident lawsuit must be made within two years after the date of the last payment of no-fault benefits was satisfied.
Before July 20, 1998, the statute of limitations statute of the Hawaii Motor Vehicle Insurance Law provided that no suit shall be brought on a contract for motor vehicle insurance benefits or on a contract for optional additional coverage more than the latter of two years from the day of the car accident, two years after the last payment of car insurance or optional additional benefits, two years after the final order in an arbitration, or two years after the final judgment in, or dismissal with prejudice of, a tort action arising out of a motor vehicle accident in which a cause of action for insurance bad faith arises out of the tort action.
In Honbo v. Hawaiian Insurance and Guaranty Co, the application of the predecessor of the statute of underinsured motorist claims was an issue. The plaintiffs, in this case, were asserting a claim for underinsured motorist benefits more than two years after the last payment of insurance benefits, but within a few months of settling their BI liability claim.
The UIM insurance company would not honor the claim because the two-year statute of limitations period had expired. The Hawaii Appeals Court would not create a new statute of limitations. This court determined that the plaintiff's claim had expired, but that this law should be corrected by the Hawaii State Legislature.
After the court made its decision in the Honbo case, people started making unnecessary UIM claims in order to comply with the statute of limitations deadline. They did this even though the bodily injury claim had not yet been resolved. Therefore, in 1998 the legislature amended the statute of limitations to clarify that a claim for UIM benefits would be on time if it was made within two years after payment of liability coverage.