1.1                          A bill for an act 
  1.2             relating to insurance; no-fault auto; regulating 
  1.3             rental vehicle coverages; determining when a vehicle 
  1.4             is rented; modifying the right to compensation for 
  1.5             loss of use of a damaged rented motor vehicle; 
  1.6             providing for limits of liability for motor vehicle 
  1.7             lessors; amending Minnesota Statutes 1994, section 
  1.8             65B.49, subdivision 5a. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 65B.49, 
  1.11  subdivision 5a, is amended to read: 
  1.12     Subd. 5a.  [RENTAL VEHICLES.] (a) Every plan of reparation 
  1.13  security insuring a natural person as named insured, covering 
  1.14  private passenger vehicles as defined under section 65B.001, 
  1.15  subdivision 3, and pickup trucks and vans as defined under 
  1.16  section 168.011 must provide that all of the obligation for 
  1.17  damage and loss of use to a rented private passenger vehicle, 
  1.18  including pickup trucks and vans as defined under section 
  1.19  168.011, and rented trucks with a registered gross vehicle 
  1.20  weight of 26,000 pounds or less would be covered by the property 
  1.21  damage liability portion of the plan.  This subdivision does not 
  1.22  apply to plans of reparation security covering only motor 
  1.23  vehicles registered under section 168.10, subdivision 1a, 1b, 
  1.24  1c, or 1d, or recreational equipment as defined under section 
  1.25  168.011.  The obligation of the plan must not be contingent on 
  1.26  fault or negligence.  In all cases where the plan's property 
  1.27  damage liability coverage is less than $35,000, the coverage 
  2.1   available under the subdivision must be $35,000.  Other than as 
  2.2   described in this paragraph, nothing in this section amends or 
  2.3   alters the provisions of the plan of reparation security as to 
  2.4   primacy of the coverages in this section. 
  2.5      (b) A vehicle is rented for purposes of this subdivision if:
  2.6      (1) if the rate for the use of the vehicle is determined on 
  2.7   a weekly or daily basis.  A vehicle is not rented for purposes 
  2.8   of this subdivision if the rate for the vehicle's use is 
  2.9   determined on a monthly or longer period.; or 
  2.10     (2) during the time that a vehicle is loaned as a 
  2.11  replacement for a vehicle being serviced or repaired regardless 
  2.12  of whether the customer is charged a fee for the use of the 
  2.13  vehicle. 
  2.14     A vehicle is not rented for the purposes of this 
  2.15  subdivision if the rate for the vehicle's use is determined on a 
  2.16  monthly or longer period. 
  2.17     (c) The policy or certificate issued by the plan must 
  2.18  inform the insured of the application of the plan to private 
  2.19  passenger rental vehicles, including pickup trucks and vans as 
  2.20  defined under section 168.011, and that the insured may not need 
  2.21  to purchase additional coverage from the rental company. 
  2.22     (d) Where an insured has two or more vehicles covered by a 
  2.23  plan or plans of reparation security containing the rented motor 
  2.24  vehicle coverage required under paragraph (a), the insured may 
  2.25  select the plan the insured wishes to collect from and that plan 
  2.26  is entitled to a pro rata contribution from the other plan or 
  2.27  plans based upon the property damage limits of liability.  If 
  2.28  the person renting the motor vehicle is also covered by the 
  2.29  person's employer's insurance policy or the employer's 
  2.30  automobile self-insurance plan, the reparation obligor under the 
  2.31  employer's policy or self-insurance plan has primary 
  2.32  responsibility to pay claims arising from use of the rented 
  2.33  vehicle. 
  2.34     (e) A notice advising the insured of rental vehicle 
  2.35  coverage must be given by the reparation obligor to each current 
  2.36  insured with the first renewal notice after January 1, 1989.  
  3.1   The notice must be approved by the commissioner of commerce.  
  3.2   The commissioner may specify the form of the notice.  
  3.3      (f) When a motor vehicle is rented or leased in this state 
  3.4   on a weekly or daily basis, there must be attached to the rental 
  3.5   contract a separate form containing a written notice in at least 
  3.6   10-point bold type, if printed, or in capital letters, if 
  3.7   typewritten, which states: 
  3.8      Under Minnesota law, a personal automobile insurance policy 
  3.9      issued in Minnesota must cover the rental of this motor 
  3.10     vehicle against damage to the vehicle and against loss of 
  3.11     use of the vehicle.  Therefore, purchase of any collision 
  3.12     damage waiver or similar insurance affected in this rental 
  3.13     contract is not necessary if your policy was issued in 
  3.14     Minnesota. 
  3.15  No collision damage waiver or other insurance offered as part of 
  3.16  or in conjunction with a rental of a motor vehicle may be sold 
  3.17  unless the person renting the vehicle provides a written 
  3.18  acknowledgment that the above consumer protection notice has 
  3.19  been read and understood. 
  3.20     (g) When damage to a rented vehicle is covered by a plan of 
  3.21  reparation security as provided under paragraph (a), the rental 
  3.22  contract must state that payment by the reparation obligor 
  3.23  within the time limits of section 72A.201 is acceptable, and 
  3.24  prior payment by the renter is not required. 
  3.25     (h) To be compensated for the loss of use of a damaged 
  3.26  rented motor vehicle, the car rental company must prove: 
  3.27     (1) that had the vehicle been available, it would have been 
  3.28  rented; and 
  3.29     (2) that no other vehicle was available for rental in place 
  3.30  of the damaged vehicle. 
  3.31     The standard of proof set forth in this paragraph does not 
  3.32  limit the responsibility of a reparation obligor to provide an 
  3.33  insured with coverage for any loss of use for which the 
  3.34  reparation obligor is otherwise responsible.  A car rental 
  3.35  company may be compensated for loss of use of a damaged rental 
  3.36  motor vehicle only for the period when the damaged car actually 
  4.1   would have been rented.  Compensation for the loss of use of a 
  4.2   damaged rented motor vehicle is limited to a period no longer 
  4.3   than 14 days. 
  4.4      (i) Notwithstanding section 170.54, a motor vehicle lessor 
  4.5   licensed according to section 168.27 or an owner of a rented 
  4.6   vehicle as defined in paragraph (b) is not liable for basic 
  4.7   economic losses or other legal damages resulting from the 
  4.8   operation of a rented motor vehicle in an amount greater than 
  4.9   the mandatory minimum limits of insurance liability coverage 
  4.10  required by section 65B.49, subdivisions 1 to 3.  Nothing in 
  4.11  this paragraph exempts licensed motor vehicle lessors or owners 
  4.12  of rented motor vehicles, as defined by paragraph (b), from the 
  4.13  obligations of compulsory insurance through a policy of 
  4.14  insurance as established in section 65B.48, subdivision 2, or 
  4.15  through self-insurance as established in section 65B.48, 
  4.16  subdivision 3; or from obligations arising from the requirements 
  4.17  of section 72A.125 for products sold in conjunction with the 
  4.18  rental of a motor vehicle. 
  4.19     Sec. 2.  [EFFECTIVE DATE; APPLICATION.] 
  4.20     Section 1 is effective August 1, 1995.  The provision 
  4.21  relating to the determination of when a vehicle is rented 
  4.22  applies to plans of reparation security issued or renewed on or 
  4.23  after that date and the remainder of the act applies to causes 
  4.24  of action arising from incidents occurring on or after that date.