1999 Legislation
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HOUSE BILL NO. 225 – MV, loaned, insurance coverage

HOUSE BILL NO. 225

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H0225...........................................................by BUSINESS
MOTOR VEHICLES - Amends existing law to provide that motor vehicle
liability insurance policies providing coverage to motor vehicle owners
shall provide that in the event of an accident, primary coverage shall be
provided by the insured operator of the loaned motor vehicle; to provide an
exception; and to provide that the liability of an owner of a motor vehicle
is limited to insurance coverages exceeding the coverages provided by the
insured, but negligent, operator of the loaned vehicle.

02/12    House intro - 1st rdg - to printing
02/15    Rpt prt - to Bus

Bill Text


H0225


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999
                                                                        

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 225

                                  BY BUSINESS COMMITTEE

 1                                        AN ACT
 2    RELATING TO MOTOR VEHICLES; AMENDING SECTION 49-1212, IDAHO CODE,  TO  PROVIDE
 3        THAT  MOTOR  VEHICLE  LIABILITY  INSURANCE  POLICIES PROVIDING COVERAGE TO
 4        MOTOR VEHICLE OWNERS SHALL PROVIDE THAT IN THE EVENT OF AN  ACCIDENT  PRI-
 5        MARY  COVERAGE  SHALL  BE  PROVIDED  BY THE INSURED OPERATOR OF THE LOANED
 6        MOTOR VEHICLE, TO PROVIDE AN EXCEPTION AND TO MAKE TECHNICAL  CORRECTIONS;
 7        AND AMENDING SECTION 49-2417, IDAHO CODE, TO PROVIDE THAT THE LIABILITY OF
 8        AN  OWNER  OF  A MOTOR VEHICLE IS LIMITED TO INSURANCE COVERAGES EXCEEDING
 9        THE COVERAGES PROVIDED BY THE INSURED BUT NEGLIGENT OPERATOR OF THE LOANED
10        VEHICLE.

11    Be It Enacted by the Legislature of the State of Idaho:

12        SECTION 1.  That Section 49-1212, Idaho Code, be, and the same  is  hereby
13    amended to read as follows:

14        49-1212.  EXPRESSED,  PERMITTED  AND  IMPLIED  PROVISIONS OF MOTOR VEHICLE
15    LIABILITY POLICY. (1) An owner's policy of liability insurance shall:
16        (a)  Designate by explicit description or  by  appropriate  reference  all
17        motor vehicles with respect to which coverage is to be granted; and
18        (b)  Insure  the  person  named  therein and any other person, as insured,
19        using any such described motor vehicles with the express or  implied  per-
20        mission  of  the named insured, against loss from the liability imposed by
21        law for damages arising out of the ownership, maintenance or  use  of  the
22        motor vehicles within the United States of America or the Dominion of Can-
23        ada,  subject  to  limits exclusive of interest and costs, with respect to
24        each motor vehicle, as provided in section 49-117, Idaho Code.
25        (2)  An operator's policy of liability insurance shall insure  the  person
26    named  as  insured therein against loss from the liability imposed upon him by
27    law for damages arising out of the use by him of any motor vehicle  not  owned
28    by  him,  within the same territorial limits and subject to the same limits of
29    liability as are set forth in subsection (1) of this section with  respect  to
30    an owner's policy of liability insurance.
31        (3)  A  motor vehicle liability policy shall state the name and address of
32    the named insured, the coverage afforded by  the  policy,  the    premiun
33      premium  charged therefor, the policy period and the limits
34    of  liability, and shall contain an agreement or be indorsed that insurance is
35    provided in accordance with the coverage defined in this chapter  as  respects
36    bodily injury and death or property damage, or both, and is subject to all the
37    provisions of this chapter.
38        (4)  A motor vehicle liability policy shall not insure any liability under
39    any   workmen's   worker's  compensation law as provided
40    in title 72, Idaho Code, nor any liability on account of bodily injury  to  or
41    death  of  an  employee  of the insured while engaged in the employment, other
42    than domestic, of the insured, or while engaged in the operation,  maintenance
43    or repair of any described motor vehicle nor any liability for damage to prop-


                                          2

 1    erty owned by, rented to, in charge of or transported by the insured.
 2        (5)  Every  motor vehicle liability policy shall be subject to the follow-
 3    ing provisions which need not be contained therein:
 4        (a)  The policy may not be canceled or annulled as to any liability by any
 5        agreement between the insurance carrier and the insured after  the  occur-
 6        rence  of any injury or damage covered by the motor vehicle liability pol-
 7        icy.
 8        (b)  Satisfaction by the insured of a judgment for injury or damage  shall
 9        not be a condition precedent to the right or duty of the insurance carrier
10        to make payment on account of the injury or damage.
11        (c)  The  insurance  carrier shall have the right to settle any claim cov-
12        ered by the policy, and if the settlement  is  made  in  good  faith,  the
13        amount  shall be deductible from the limits of liability specified in sub-
14        section (1)(b) of this section.
15        (d)  The policy and its written application, if  any,  and  any  rider  or
16        indorsement  which  does  not conflict with the provisions of this chapter
17        shall constitute the entire contract between the parties.
18        (6)  Any policy which grants the coverage required  for  a  motor  vehicle
19    liability  policy  may also grant any lawful coverage in excess of or in addi-
20    tion to the coverage specified for a motor vehicle liability policy,  and  any
21    excess  or  additional coverage shall not be subject to the provisions of this
22    chapter. With respect to a policy which grants an excess of additional  cover-
23    age the term "motor vehicle liability policy" shall apply only to that part of
24    the coverage which is required by this section.
25        (7)  Any motor vehicle liability policy may provide that the insured shall
26    reimburse  the  insurance  carrier for any payment the insurance carrier would
27    not have been obligated to make under the terms of the policy except  for  the
28    provisions of this chapter.
29        (8)  Any  motor  vehicle liability policy may provide for the prorating of
30    the insurance with other valid and collectible insurance.
31        (9)  The requirements for a motor vehicle liability  policy  may  be  ful-
32    filled  by  the  policies  of  one  or  more insurance carriers which policies
33    together meet the requirements of this chapter.
34        (10)  Any binder issued pending the issuance of a motor vehicle  liability
35    policy shall be deemed to fulfill the requirements for such a policy.
36          (11) Each  motor vehicle liability policy issued in this state pro-
37    viding coverage to motor vehicle owners shall provide that  when  an  accident
38    involves an operator of a loaned vehicle who is not the owner, and at the time
39    of  the  accident  the operator is insured under an insurance policy complying
40    with the laws of this  state,  primary  coverage  shall  be  provided  by  the
41    operator's insurance policy, and only excess coverage shall be provided by the
42    owner's  insurance policy. This provision does not apply to an employee who is
43    driving an employer owned vehicle for business purposes. 

44        SECTION 2.  That Section 49-2417, Idaho Code, be, and the same  is  hereby
45    amended to read as follows:

46        49-2417.  OWNER'S TORT LIABILITY FOR NEGLIGENCE OF ANOTHER -- SUBROGATION.
47    (1)  Every owner of a motor vehicle is liable and responsible for the death of
48    or injury to a person or property resulting from negligence in  the  operation
49    of his motor vehicle, in the business of the owner or otherwise, by any person
50    using  or  operating the vehicle with the permission, expressed or implied, of
51    the owner, and the negligence of the person shall be imputed to the owner  for
52    all purposes of civil damages.   Provided, that the liability of an owner
53    of  a  motor vehicle operated on the public highways is limited as follows: an


                                          3

 1    owner of a motor vehicle is liable for personal  injury  and  property  damage
 2    caused  by  the  negligent operation of a motor vehicle by a person other than
 3    the owner only so far as the owner is an insured  under  an  insurance  policy
 4    that provides coverages exceeding the coverages provided by the insurance pol-
 5    icy    of  the  operator of the loaned vehicle, who shall be primarily liable.
 6    
 7        (2)  The liability of an owner for imputed negligence imposed by the  pro-
 8    visions  of this section and not arising through the relationship of principal
 9    and agent or master and servant is limited to  the  amounts  set  forth  under
10    "proof of financial responsibility" in section 49-117, Idaho Code.
11        (3)  In  any  action against an owner for imputed negligence as imposed by
12    the provisions of this section the operator of the vehicle whose negligence is
13    imputed to the owner shall be made a defendant party if  personal  service  of
14    process  can  be had upon that operator within Idaho. Upon recovery of a judg-
15    ment, recourse shall first be had against the  property  of  the  operator  so
16    served.
17        (4)  In  the  event a recovery is had under the provisions of this section
18    against an owner for imputed negligence the owner is  subrogated  to  all  the
19    rights  of  the  person  injured  and  may recover from the operator the total
20    amount of any judgment and costs recovered against the owner. If the bailee of
21    an owner with the permission, expressed or  implied,  of  the  owner,  permits
22    another  to  operate  the  motor vehicle of the owner, then the bailee and the
23    driver shall both be deemed operators of the vehicle of the owner, within  the
24    meaning of subsections (3) and (4) of this section.
25        (5)  Where  two (2) or more persons are injured or killed in one (1) acci-
26    dent, the owner may settle or pay any bona fide claim for damages arising  out
27    of  personal  injuries or death, whether reduced to a judgment or not, and the
28    payments shall diminish to the  extent  of  the  owners'  total  liability  on
29    account  of  the accident. Payments so made, aggregating the full sum of fifty
30    thousand dollars ($50,000), shall extinguish all liability of the owner  here-
31    under  to the claimants and all other persons on account of the accident. Lia-
32    bility may exist by reason of imputed negligence, pursuant  to  this  section,
33    and  not arising through the negligence of the owner nor through the relation-
34    ship of principal and agent nor master and servant.
35        (6)  If a motor vehicle is sold  under  a  contract  of  conditional  sale
36    whereby  the  title  to the motor vehicle remains in the vendor, the vendor or
37    his assignee shall be deemed an owner within the provisions of this section.

Statement of Purpose / Fiscal Impact


                       STATEMENT OF PURPOSE

                             RS 08887

This proposed legislation provides that, in the event of an
accident involving a motor vehicle being operated by an insured
driver who is not the owner of the vehicle, the driver's liability
insurance coverage shall become primary, and the vehicle owner's
insurance shall become secondary.




FISCAL NOTE

None.

       CONTACT: Denise Brennan
                Idaho Automobile Dealers Association
                Phone: 853-4663
       
                                       STATEMENT OF PURPOSE/ FISCAL NOTE  Bill No.  E 225