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H0621...........................................................by BUSINESS
MOTOR VEHICLES - RENTAL - Amends existing law to revise provisions
applicable to insurance coverage for motor vehicles offered to the public
for temporary rental or hire.
02/06 House intro - 1st rdg - to printing
02/09 Rpt prt - to Bus
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 621
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO MOTOR VEHICLE INSURANCE; AMENDING SECTION 49-1212, IDAHO CODE, TO
3 REMOVE PROVISIONS THAT AN OWNER'S INSURANCE COVERAGE SHALL BE PRIMARY IF
4 THE OWNER RECEIVES CERTAIN COMPENSATION, TO REQUIRE ENTITIES OFFERING
5 MOTOR VEHICLES TO THE PUBLIC FOR TEMPORARY RENTAL OR HIRE TO PROVIDE LIA-
6 BILITY INSURANCE OR SELF-INSURANCE INSURING THE RENTER AND OTHER AUTHO-
7 RIZED OPERATORS AGAINST LOSS FOR CERTAIN DAMAGES, TO PROVIDE THAT SUCH
8 INSURANCE OR SELF-INSURANCE SHALL BE PRIMARY AND THE OPERATOR'S MOTOR
9 VEHICLE INSURANCE SHALL BE SECONDARY OR EXCESS, AND TO PROVIDE THAT UNLESS
10 OTHERWISE STATED IN THE DRIVER'S POLICY, THE INSURANCE POLICY OR SELF-
11 INSURANCE OF THE ENTITY OFFERING THE MOTOR VEHICLE FOR TEMPORARY RENTAL OR
12 HIRE SHALL BE PRIMARY AND ANY INSURANCE OF THE RENTER OR OPERATOR SHALL BE
13 SECONDARY OR EXCESS AS TO ANY DAMAGE TO THE RENTED OR HIRED VEHICLE.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 49-1212, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 49-1212. EXPRESSED, PERMITTED AND IMPLIED PROVISIONS OF MOTOR VEHICLE
18 LIABILITY POLICY. (1) An owner's policy of liability insurance shall:
19 (a) Designate by explicit description or by appropriate reference all
20 motor vehicles with respect to which coverage is to be granted; and
21 (b) Insure the person named therein and any other person, as insured,
22 using any such described motor vehicles with the express or implied per-
23 mission of the named insured, against loss from the liability imposed by
24 law for damages arising out of the ownership, maintenance or use of the
25 motor vehicles within the United States of America or the Dominion of Can-
26 ada, subject to limits exclusive of interest and costs, with respect to
27 each motor vehicle, as provided in section 49-117, Idaho Code.
28 (2) An operator's policy of liability insurance shall insure the person
29 named as insured therein against loss from the liability imposed upon him by
30 law for damages arising out of the use by him of any motor vehicle not owned
31 by him, within the same territorial limits and subject to the same limits of
32 liability as are set forth in subsection (1) of this section with respect to
33 an owner's policy of liability insurance.
34 (3) A motor vehicle liability policy shall state the name and address of
35 the named insured, the coverage afforded by the policy, the premium charged
36 therefor, the policy period and the limits of liability, and shall contain an
37 agreement or be indorsed that insurance is provided in accordance with the
38 coverage defined in this chapter as respects bodily injury and death or prop-
39 erty damage, or both, and is subject to all the provisions of this chapter.
40 (4) A motor vehicle liability policy shall not insure any liability under
41 any worker's compensation law as provided in title 72, Idaho Code, nor any
42 liability on account of bodily injury to or death of an employee of the
43 insured while engaged in the employment, other than domestic, of the insured,
2
1 or while engaged in the operation, maintenance or repair of any described
2 motor vehicle nor any liability for damage to property owned by, rented to, in
3 charge of or transported by the insured.
4 (5) Every motor vehicle liability policy shall be subject to the follow-
5 ing provisions which need not be contained therein:
6 (a) The policy may not be canceled or annulled as to any liability by any
7 agreement between the insurance carrier and the insured after the occur-
8 rence of any injury or damage covered by the motor vehicle liability pol-
9 icy.
10 (b) Satisfaction by the insured of a judgment for injury or damage shall
11 not be a condition precedent to the right or duty of the insurance carrier
12 to make payment on account of the injury or damage.
13 (c) The insurance carrier shall have the right to settle any claim cov-
14 ered by the policy, and if the settlement is made in good faith, the
15 amount shall be deductible from the limits of liability specified in sub-
16 section (1)(b) of this section.
17 (d) The policy and its written application, if any, and any rider or
18 indorsement which does not conflict with the provisions of this chapter
19 shall constitute the entire contract between the parties.
20 (6) Any policy which grants the coverage required for a motor vehicle
21 liability policy may also grant any lawful coverage in excess of or in addi-
22 tion to the coverage specified for a motor vehicle liability policy, and any
23 excess or additional coverage shall not be subject to the provisions of this
24 chapter. With respect to a policy which grants an excess of additional cover-
25 age the term "motor vehicle liability policy" shall apply only to that part of
26 the coverage which is required by this section.
27 (7) Any motor vehicle liability policy may provide that the insured shall
28 reimburse the insurance carrier for any payment the insurance carrier would
29 not have been obligated to make under the terms of the policy except for the
30 provisions of this chapter.
31 (8) Any motor vehicle liability policy may provide for the prorating of
32 the insurance with other valid and collectible insurance.
33 (9) The requirements for a motor vehicle liability policy may be ful-
34 filled by the policies of one (1) or more insurance carriers which policies
35 together meet the requirements of this chapter.
36 (10) Any binder issued pending the issuance of a motor vehicle liability
37 policy shall be deemed to fulfill the requirements for such a policy.
38 (11) When the negligent operation of a loaned vehicle results in the death
39 or injury to a person or personal property, except for the loaned vehicle, and
40 at the time of the negligent operation of the loaned vehicle the operator of
41 the loaned vehicle is insured under a motor vehicle liability policy complying
42 with the financial responsibility law of this state, primary coverage for the
43 death of or injury to a person or personal property, except for the loaned
44 vehicle, shall be provided by the operator's motor vehicle liability policy.
45 The insurance policy of the owner of the loaned vehicle shall provide second-
46 ary or excess coverage for the death of or injury to a person or personal
47 property, however the loaned vehicle owner's insurance shall provide primary
48 coverage for damage to the loaned vehicle.
49 (a) For the purpose of this subsection, "loaned vehicle" means a motor
50 vehicle which is provided for temporary use without charge to the operator
51 by an entity licensed under chapter 16, title 49, Idaho Code, for the pur-
52 pose of demonstrating the vehicle to the operator as a prospective pur-
53 chaser, or as a convenience to the operator during the repairing or ser-
54 vicing of a motor vehicle for the operator, regardless of whether such
55 repair or service is performed by the owner of the loaned vehicle or by
3
1 some other person or business.
2 (b) Should the owner of a motor vehicle receive any compensation from or
3 on behalf of the operator for the temporary use of the motor vehicle,
4 excluding any compensation provided to the owner as a result of the
5 repairing or servicing of a motor vehicle for the operator, the owner's
6 insurance coverage shall be primary and the operator's motor vehicle
7 insurance shall be secondary or excess.
8 (12) (a) An entity in the business of offering motor vehicles to the pub-
9 lic for temporary rental or hire shall provide liability insurance or
10 self-insurance insuring the renter and all other authorized operators of
11 such motor vehicles against loss from the liability imposed by law for
12 damages arising out of the rental, hire, maintenance or use of such vehi-
13 cles in at least the amounts provided in section 49-117, Idaho Code. Such
14 liability insurance or self-insurance shall be primary and the operator's
15 motor vehicle insurance, if any, shall be secondary or excess.
16 (b) Unless otherwise stated in the policy of the driver, the motor vehi-
17 cle insurance policy or self-insurance of an entity in the business of
18 offering motor vehicles to the public for temporary rental or hire shall
19 also be primary, and any insurance of the renter or operator shall be sec-
20 ondary or excess, as to any damage to the rented or hired vehicle.
STATEMENT OF PURPOSE
RS 13824
In 2000, SB1309 attempted to clarify that in car rental situations
the primary insurance coverage was to be provided by the owner of
the vehicle. Because of the reference to Idaho Code Chapter 16,
Title 49, there is some confusion as to whether this section
applies to all rental car situations. This bill clarifies the
original intent of SB1309.
FISCAL NOTE
There is no fiscal impact to the General Fund or other state funds.
Contact: Phil Barber
State Farm Insurance
371-8484
STATEMENT OF PURPOSE/FISCAL NOTE H 621