SF 1752

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:23am

A bill for an act
relating to commerce; providing that residual liability coverage under an
automobile insurance policy covers the cost of rental cars in certain situations;
amending Minnesota Statutes 2008, section 65B.49, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 65B.49, subdivision 3, is amended to read:

Subd. 3.

Residual liability insurance.

(1) Each plan of reparation security shall
also contain stated limits of liability, exclusive of interest and costs, with respect to each
vehicle for which coverage is thereby granted, of not less than $30,000 because of bodily
injury to one person in any one accident and, subject to said limit for one person, of not
less than $60,000 because of injury to two or more persons in any one accident, and, if
the accident has resulted in injury to or destruction of property, of not less than $10,000
because of such injury to or destruction of property of others in any one accident.

(2) Under residual liability insurance the reparation obligor shall be liable to pay,
on behalf of the insured, sums which the insured is legally obligated to pay as damages
because of bodily injury and property damage arising out of the ownership, maintenance
or use of any motor vehicle, including a motor vehicle permissively operated by an insured
as that term is defined in section 65B.43, subdivision 5, if the injury or damage occurs
within this state, the United States of America, its territories or possessions, or Canada.
A reparation obligor shall also be liable to pay sums which another reparation obligor is
entitled to recover under the indemnity provisions of section 65B.53, subdivision 1.

(3) Every plan of reparation security shall be subject to the following provisions
which need not be contained therein:

(a) The liability of the reparation obligor with respect to the residual liability
coverage required by this clause shall become absolute whenever injury or damage occurs;
such liability may not be canceled or annulled by any agreement between the reparation
obligor and the insured after the occurrence of the injury or damage; no statement made
by the insured or on the insured's behalf and no violation of said policy shall defeat or
void said policy.

(b) The satisfaction by the insured of a judgment for such injury or damage shall not
be a condition precedent to the right or duty of the reparation obligor to make payment on
account of such injury or damage.

(c) The reparation obligor shall have the right to settle any claim covered by
the residual liability insurance policy, and if such settlement is made in good faith, the
amount thereof shall be deductible from the limits of liability for the accident out of
which such claim arose.

(d) Except as provided in subdivision 5a, a residual liability insurance policy shall
be excess of a nonowned vehicle policy whether the nonowned vehicle is borrowed or
rented, or used for business or pleasure. A nonowned vehicle is one not used or provided
on a regular basis.

new text begin (e) "Damages" for purposes of clause (2) includes the actual cost of a rental car for a
person 18 to 24 years of age whose automobile was rendered inoperable in an accident for
which the insured's residual liability insurance coverage applies.
new text end

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective January 1, 2010, and applies to plans of reparation security
issued or renewed on or after that date.
new text end