SF 2110

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; regulating rental vehicle 
  1.3             coverages; amending Minnesota Statutes 2000, section 
  1.4             65B.49, subdivisions 3 and 5a. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2000, section 65B.49, 
  1.7   subdivision 3, is amended to read: 
  1.8      Subd. 3.  [RESIDUAL LIABILITY INSURANCE.] (1) Each plan of 
  1.9   reparation security shall also contain stated limits of 
  1.10  liability, exclusive of interest and costs, with respect to each 
  1.11  vehicle for which coverage is thereby granted, of not less than 
  1.12  $30,000 because of bodily injury to one person in any one 
  1.13  accident and, subject to said limit for one person, of not less 
  1.14  than $60,000 because of injury to two or more persons in any one 
  1.15  accident, and, if the accident has resulted in injury to or 
  1.16  destruction of property, of not less than $10,000 because of 
  1.17  such injury to or destruction of property of others in any one 
  1.18  accident. 
  1.19     (2) Under residual liability insurance the reparation 
  1.20  obligor shall be liable to pay, on behalf of the insured, sums 
  1.21  which the insured is legally obligated to pay as damages because 
  1.22  of bodily injury and property damage arising out of the 
  1.23  ownership, maintenance or use of a motor vehicle if the injury 
  1.24  or damage occurs within this state, the United States of 
  1.25  America, its territories or possessions, or Canada.  A 
  2.1   reparation obligor shall also be liable to pay sums which 
  2.2   another reparation obligor is entitled to recover under the 
  2.3   indemnity provisions of section 65B.53, subdivision 1. 
  2.4      (3) Every plan of reparation security shall be subject to 
  2.5   the following provisions which need not be contained therein: 
  2.6      (a) The liability of the reparation obligor with respect to 
  2.7   the residual liability coverage required by this clause shall 
  2.8   become absolute whenever injury or damage occurs; such liability 
  2.9   may not be canceled or annulled by any agreement between the 
  2.10  reparation obligor and the insured after the occurrence of the 
  2.11  injury or damage; no statement made by the insured or on the 
  2.12  insured's behalf and no violation of said policy shall defeat or 
  2.13  void said policy. 
  2.14     (b) The satisfaction by the insured of a judgment for such 
  2.15  injury or damage shall not be a condition precedent to the right 
  2.16  or duty of the reparation obligor to make payment on account of 
  2.17  such injury or damage. 
  2.18     (c) The reparation obligor shall have the right to settle 
  2.19  any claim covered by the residual liability insurance policy, 
  2.20  and if such settlement is made in good faith, the amount thereof 
  2.21  shall be deductible from the limits of liability for the 
  2.22  accident out of which such claim arose. 
  2.23     (d) Except as provided in subdivision 5a, a residual 
  2.24  liability insurance policy shall be excess of a nonowned vehicle 
  2.25  policy whether when the nonowned vehicle is borrowed or rented, 
  2.26  or whether used for business or pleasure.  A nonowned vehicle is 
  2.27  one not used or provided on a regular basis.  
  2.28     Sec. 2.  Minnesota Statutes 2000, section 65B.49, 
  2.29  subdivision 5a, is amended to read: 
  2.30     Subd. 5a.  [RENTAL VEHICLES.] (a) Every plan of reparation 
  2.31  security, wherever issued, insuring a natural person as named 
  2.32  insured, covering private passenger vehicles as defined under 
  2.33  section 65B.001, subdivision 3, and pickup trucks and vans as 
  2.34  defined under section 168.011 must:  (1) provide that all of the 
  2.35  obligation for damage and loss of use to a rented private 
  2.36  passenger vehicle, including pickup trucks and vans as defined 
  3.1   under section 168.011, and rented trucks with a registered gross 
  3.2   vehicle weight of 26,000 pounds or less would be covered by the 
  3.3   property damage liability portion of the plan; and (2) extend 
  3.4   that plan's basic economic loss benefits, residual liability 
  3.5   insurance, and uninsured and underinsured motorist coverages to 
  3.6   the operation or use of the rented motor vehicle.  This 
  3.7   subdivision does not apply to plans of reparation security 
  3.8   covering only motor vehicles registered under section 168.10, 
  3.9   subdivision 1a, 1b, 1c, or 1d, or recreational equipment as 
  3.10  defined under section 168.011.  The obligation of the plan for 
  3.11  damage or loss of use to a rented motor vehicle must not be 
  3.12  contingent on fault or negligence.  In all cases where the 
  3.13  plan's property damage liability coverage is less than $35,000, 
  3.14  the coverage available under the subdivision must be $35,000.  
  3.15  Other than as described in this paragraph and paragraph (i), 
  3.16  clause (2), or in paragraph (j), nothing in this section amends 
  3.17  or alters the provisions of the plan of reparation security as 
  3.18  to primacy of the coverages in this section. 
  3.19     (b) A vehicle is rented for purposes of this subdivision: 
  3.20     (1) if the rate for the use of the vehicle is determined on 
  3.21  a monthly, weekly, or daily basis; or 
  3.22     (2) during the time that a vehicle is loaned as a 
  3.23  replacement for a vehicle being serviced or repaired regardless 
  3.24  of whether the customer is charged a fee for the use of the 
  3.25  vehicle. 
  3.26     A vehicle is not rented for the purposes of this 
  3.27  subdivision if the rate for the vehicle's use is determined on a 
  3.28  period longer than one month or if the term of the rental 
  3.29  agreement is longer than one month.  A vehicle is not rented for 
  3.30  purposes of this subdivision if the rental agreement has a 
  3.31  purchase or buyout option or otherwise functions as a substitute 
  3.32  for purchase of the vehicle.  
  3.33     (c) The policy or certificate issued by the plan must 
  3.34  inform the insured of the application of the plan to private 
  3.35  passenger rental vehicles, including pickup trucks and vans as 
  3.36  defined under section 168.011, and that the insured may not need 
  4.1   to purchase additional coverage from the rental company. 
  4.2      (d) Where an insured has two or more vehicles covered by a 
  4.3   plan or plans of reparation security containing the rented motor 
  4.4   vehicle coverage required under paragraph (a), the insured may 
  4.5   select the plan the insured wishes to collect from and that plan 
  4.6   is entitled to a pro rata contribution from the other plan or 
  4.7   plans based upon the property damage limits of liability.  If 
  4.8   the person renting the motor vehicle is also covered by the 
  4.9   person's employer's insurance policy or the employer's 
  4.10  automobile self-insurance plan, the reparation obligor under the 
  4.11  employer's policy or self-insurance plan has primary 
  4.12  responsibility to pay claims arising from use of the rented 
  4.13  vehicle. 
  4.14     (e) A notice advising the insured of rental vehicle 
  4.15  coverage must be given by the reparation obligor to each current 
  4.16  insured with the first renewal notice after January 1, 1989.  
  4.17  The notice must be approved by the commissioner of commerce.  
  4.18  The commissioner may specify the form of the notice.  
  4.19     (f) When a motor vehicle is rented in this state, there 
  4.20  must be attached to the rental contract a separate form 
  4.21  containing must contain a written notice in at least 10-point 
  4.22  bold type, if printed, or in capital letters, if typewritten, 
  4.23  which states: 
  4.24     Under Minnesota law, a personal automobile insurance policy 
  4.25     issued in Minnesota must (1) cover the rental of this motor 
  4.26     vehicle against damage to the vehicle and against loss of 
  4.27     use of the vehicle, and (2) extend that policy's basic 
  4.28     economic loss benefits, residual liability insurance, and 
  4.29     uninsured and underinsured motorist coverages to the 
  4.30     operation or use of a rented motor vehicle.  Therefore, 
  4.31     purchase of any collision damage waiver or similar 
  4.32     insurance affected in this rental contract is not necessary 
  4.33     if your policy was issued in Minnesota.  In addition, 
  4.34     purchase of any additional liability insurance is not 
  4.35     necessary if your policy was issued in Minnesota unless you 
  4.36     wish to have coverage for liability that exceeds the amount 
  5.1      specified in your personal automobile insurance policy. 
  5.2   No collision damage waiver or other insurance offered as part of 
  5.3   or in conjunction with a rental of a motor vehicle may be sold 
  5.4   unless the person renting the vehicle provides a written 
  5.5   acknowledgment that the above consumer protection notice has 
  5.6   been read and understood. 
  5.7      (g) When damage to a rented vehicle is covered by a plan of 
  5.8   reparation security as provided under paragraph (a), the rental 
  5.9   contract must state that payment by the reparation obligor 
  5.10  within the time limits of section 72A.201 is acceptable, and 
  5.11  prior payment by the renter is not required. 
  5.12     (h) Compensation for the loss of use of a damaged rented 
  5.13  motor vehicle is limited to a period no longer than 14 days. 
  5.14     (i)(1) For purposes of this paragraph subdivision, "rented 
  5.15  motor vehicle" means a rented vehicle described in paragraph 
  5.16  (a), using the definition of "rented" provided in paragraph (b). 
  5.17     (2) Notwithstanding section 170.54, an owner of a rented 
  5.18  motor vehicle is not vicariously liable for legal damages 
  5.19  resulting from the operation of the rented motor vehicle in an 
  5.20  amount greater than $100,000 because of bodily injury to one 
  5.21  person in any one accident and, subject to the limit for one 
  5.22  person, $300,000 because of injury to two or more persons in any 
  5.23  one accident, and $50,000 because of injury to or destruction of 
  5.24  property of others in any one accident, if the owner of the 
  5.25  rented motor vehicle has in effect, at the time of the accident, 
  5.26  a policy of insurance or self-insurance, as provided in section 
  5.27  65B.48, subdivision 3, covering losses up to at least the 
  5.28  amounts set forth in this paragraph.  Nothing in this paragraph 
  5.29  alters or affects the obligations of an owner of a rented motor 
  5.30  vehicle to comply with the requirements of compulsory insurance 
  5.31  through a policy of insurance as provided in section 65B.48, 
  5.32  subdivision 2, or through self-insurance as provided in section 
  5.33  65B.48, subdivision 3, which policy of insurance or self-insured 
  5.34  plan must apply whenever the operator is not covered by a plan 
  5.35  of reparation security as provided under paragraph (a); or with 
  5.36  the obligations arising from section 72A.125 for products sold 
  6.1   in conjunction with the rental of a motor vehicle.  Nothing in 
  6.2   this paragraph alters or affects liability, other than vicarious 
  6.3   liability, of an owner of a rented motor vehicle. 
  6.4      (3) The dollar amounts stated in this paragraph shall be 
  6.5   adjusted for inflation based upon the consumer price index for 
  6.6   all urban consumers, known as the CPI-U, published by the United 
  6.7   States Bureau of Labor Statistics.  The dollar amounts stated in 
  6.8   this paragraph are based upon the value of that index for July 
  6.9   1995, which is the reference base index for purposes of this 
  6.10  paragraph.  The dollar amounts in this paragraph shall change 
  6.11  effective January 1 of each odd-numbered year based upon the 
  6.12  percentage difference between the index for July of the 
  6.13  preceding year and the reference base index, calculated to the 
  6.14  nearest whole percentage point.  The commissioner shall announce 
  6.15  and publish, on or before September 30 of the preceding year, 
  6.16  the changes in the dollar amounts required by this paragraph to 
  6.17  take effect on January 1 of each odd-numbered year.  The 
  6.18  commissioner shall use the most recent revision of the July 
  6.19  index available as of September 1.  Changes in the dollar 
  6.20  amounts must be in increments of $5,000, and no change shall be 
  6.21  made in a dollar amount until the change in the index requires 
  6.22  at least a $5,000 change.  If the United States Bureau of Labor 
  6.23  Statistics changes the base year upon which the CPI-U is based, 
  6.24  the commissioner shall make the calculations necessary to 
  6.25  convert from the old base year to the new base year.  If the 
  6.26  CPI-U is discontinued, the commissioner shall use the available 
  6.27  index that is most similar to the CPI-U. 
  6.28     (j) The plan of reparation security covering the owner of a 
  6.29  rented motor vehicle is excess of any residual liability 
  6.30  coverage insuring an operator of a rented motor vehicle if the 
  6.31  vehicle is loaned as a replacement for a vehicle being serviced 
  6.32  or repaired, regardless of whether a fee is charged for use of 
  6.33  the vehicle, provided that the vehicle so loaned is owned by the 
  6.34  service or repair business.