Print Friendly HOUSE BILL NO. 225 – MV, loaned, insurance coverage
HOUSE BILL NO. 225
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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
|||| 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
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-
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-
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
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.
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
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
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.
CONTACT: Denise Brennan
Idaho Automobile Dealers Association
STATEMENT OF PURPOSE/ FISCAL NOTE Bill No. E 225