HB 336: Recovery Operations Amendments - Utah

Substitute #1 → Substitute #2 · 5 edits

MODERATE

This bill replaces the previous version to clarify that commercial vehicle insurers must pay recovery operators directly and introduces a mandatory mediation step before arbitration. It also changes the financial dispute resolution process by requiring insurers to pay a partial amount (the lesser of 75% of the invoice or $40,000) immediately rather than posting a bond, and it adds specific definitions for commercial vehicles and non-consent police tows.

Scope change

The bill's scope remains focused on recovery operations for commercial vehicles, but the applicability of the payment and dispute resolution rules has been refined to specifically target commercial liability insurers and their riders.

REQUIREMENT

Added a mandatory mediation requirement that insurers and recovery operators must attempt to resolve disputes before proceeding to binding arbitration.

FISCAL

Changed the dispute resolution mechanism: insurers must now pay the lesser of 75% of the invoice or $40,000 immediately, replacing the previous requirement to post a bond.

DEFINITION

Added new definitions for 'Commercial vehicle', 'Motor carrier', 'Non-consent police generated tow', and 'Power unit' to clarify who and what the bill covers.

ELIGIBILITY

Clarified that the obligation to pay recovery costs falls on the motor carrier via the power unit's insurance policy, and specified that these rules apply to commercial liability insurers providing a recovery rider.

TECHNICAL

Corrected formatting errors and inconsistencies in the definitions section of the Utah Code (72-1-102) and updated the effective date in the long title.

Amended 2/26/2026 12:02:308 → Substitute #1 · 6 edits

MODERATE

This bill simplifies the rules for paying recovery operators by removing specific payment caps and the requirement for insurers to pay the lesser of 75% or $40,000, instead requiring payment of the full invoiced amount unless disputed. It also streamlines the dispute resolution process by eliminating the mandatory mediation step before arbitration and broadens the definition of recovery operations to include vehicles that impede traffic or pose hazards. The bill updates related definitions to clarify the distinction between standard towing and complex recovery scenarios.

Scope change

The bill expands the scope of 'recovery operations' to include any disabled vehicle impeding traffic or hazardous to the roadway, and clarifies that insurers must cover these costs for commercial vehicles.

REQUIREMENT

Removed the requirement for insurers to pay only the lesser of 75% of the bill or $40,000; insurers must now pay the full invoiced amount unless they dispute it.

Eliminated the mandatory mediation step; insurers and recovery operators can now proceed directly to binding arbitration for disputes.

Updated insurance requirements to mandate coverage for recovery operations on commercial vehicles when the vehicle is impeding traffic or hazardous.

DEFINITION

Broadened the definition of 'recovery operation' to include vehicles that are impeding traffic flow or are hazardous to the roadway.

Clarified that 'towing operation' applies only to vehicles in accessible positions that can be moved with standard equipment.

Added specific examples of recovery scenarios, such as vehicles overturned, in ditches, or submerged in water.

Amended Excerpts 2/26/2026 12:02:308 → Amended 2/26/2026 12:02:308 · 5 edits

MODERATE

This bill updates the legal framework for vehicle recovery operations by clarifying that insurers must pay recovery operators directly for services rendered. It establishes a specific dispute resolution process requiring mediation before arbitration and sets a $40,000 cap on insurer liability if they dispute the reasonableness of the charges. The legislation also formally defines key terms like 'recovery operation' and 'recovery operator' to distinguish them from standard towing services.

Scope change

The bill expands the scope by explicitly requiring commercial liability insurance policies to include coverage for recovery operations and clarifies that insurers covering recovered vehicles are responsible for paying the operator.

DEFINITION

Added specific definitions for 'recovery operation' and 'recovery operator' to distinguish these services from standard towing.

REQUIREMENT

Mandated that commercial liability insurance policies must include a separate endorsement covering costs associated with recovery operations.

Established a financial cap, limiting insurer liability to 75% of the invoice amount or $40,000, whichever is less, when disputing recovery charges.

ENFORCEMENT

Created a new dispute resolution mechanism requiring mediation before binding arbitration to settle disagreements over recovery costs.

ELIGIBILITY

Clarified that insurers providing coverage for recovered vehicles are directly liable for paying the recovery operator.

Enrolled → Amended Excerpts 2/26/2026 12:02:308 · 1 edit

MINOR

The bill was amended to replace the term 'endorsement' with 'rider' throughout the text, likely to align with specific insurance terminology or legislative drafting standards. No substantive policy changes, definitions, or operational requirements were altered in this excerpt.

TECHNICAL

The word 'endorsement' was replaced with 'rider' in multiple instances regarding insurance coverage for recovery operations.

Introduced → Enrolled · 6 edits · Mar 19, 2026

MODERATE

This bill updates Utah's recovery operations laws to clearly distinguish specialized recovery work from standard towing and establishes new payment and dispute resolution rules for insurers. It requires commercial liability insurers to pay recovery operators directly, sets a 60-day payment window with a $40,000 cap, and mandates binding arbitration for disputes over service costs. The bill also updates definitions to clarify what constitutes a recovery operation versus a towing operation.

Scope change

The bill expands the scope by adding specific requirements for commercial vehicle insurance policies to cover recovery operations and by creating a formal arbitration process for disputes between insurers and recovery operators.

REQUIREMENT

Requires commercial liability insurers to pay recovery operators directly for services rendered, rather than paying the insured first.

Establishes a mandatory mediation and binding arbitration process to resolve disputes regarding the reasonableness or necessity of recovery costs.

Limits insurer liability to the lesser of 75% of the invoiced amount or $40,000 if they dispute the full cost.

Requires tow truck motor carrier rotations to identify which carriers are qualified to perform specialized recovery operations.

TIMELINE

Extended the insurer payment deadline from 30 days to 60 days after receiving an invoice.

DEFINITION

Added specific definitions for 'commercial vehicle,' 'non-consent police generated tow,' and 'power unit' to clarify coverage scope.

Recovery Operations Amendments

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