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SF 744

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to insurance; regulating certain rental vehicle coverage; amending
Minnesota Statutes 2006, section 65B.49, subdivision 5a.

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

Section 1.

Minnesota Statutes 2006, section 65B.49, subdivision 5a, is amended to read:


Subd. 5a.

Rental vehicles.

(a) Every plan of reparation securitynew text begin, wherever issued,
new text end insuring a natural person as named insured, covering private passenger vehicles as defined
under section 65B.001, subdivision 3, and pickup trucks and vans as defined under section
168.011 mustnew text begin: (1)new text end provide that all of the obligation for damage and loss of use to a rented
private passenger vehicle, including pickup trucks and vans as defined under section
168.011, and rented trucks with a registered gross vehicle weight of 26,000 pounds or less
would be covered by the property damage liability portion of the plannew text begin; and (2) extend
the plan's basic economic loss benefits, residual liability insurance, and uninsured and
underinsured motorist coverages to the operation or use of the rented motor vehicle
new text end. This
subdivision does not apply to plans of reparation security covering only motor vehicles
registered under section 168.10, subdivision 1a, 1b, 1c, or 1d, or recreational vehicles as
defined under section 168.011. The obligation of the plan must not be contingent on fault
or negligence. In all cases where the plan's property damage liability coverage is less than
$35,000, the coverage available under the subdivision must be $35,000. Other than as
described in this paragraph deleted text beginor indeleted text endnew text begin; paragraph (i), clause (2); ornew text end paragraph (j), nothing in this
section amends or alters the provisions of the plan of reparation security as to primacy
of the coverages in this section.

(b) A vehicle is rented for purposes of this subdivision:

(1) if the rate for the use of the vehicle is determined on a monthly, weekly, or
daily basis; or

(2) during the time that a vehicle is loaned as a replacement for a vehicle being
serviced or repaired regardless of whether the customer is charged a fee for the use
of the vehicle.

A vehicle is not rented for the purposes of this subdivision if the rate for the vehicle's
use is determined on a period longer than one month or if the term of the rental agreement
is longer than one month. A vehicle is not rented for purposes of this subdivision if the
rental agreement has a purchase or buyout option or otherwise functions as a substitute for
purchase of the vehicle.

(c) The policy or certificate issued by the plan must inform the insured of the
application of the plan to private passenger rental vehicles, including pickup trucks and
vans as defined under section 168.011, and that the insured may not need to purchase
additional coverage from the rental company.

(d) Where an insured has two or more vehicles covered by a plan or plans of
reparation security containing the rented motor vehicle coverage required under paragraph
(a), the insured may select the plan the insured wishes to collect from and that plan is
entitled to a pro rata contribution from the other plan or plans based upon the property
damage limits of liability. If the person renting the motor vehicle is also covered by the
person's employer's insurance policy or the employer's automobile self-insurance plan,
the reparation obligor under the employer's policy or self-insurance plan has primary
responsibility to pay claims arising from use of the rented vehicle.

(e) A notice advising the insured of rental vehicle coverage must be given by the
reparation obligor to each current insured with the first renewal notice after January 1,
1989. The notice must be approved by the commissioner of commerce. The commissioner
may specify the form of the notice.

(f) When a motor vehicle is rented in this state, there must be attached to the rental
contract a separate form containing a written notice in at least 10-point bold type, if
printed, or in capital letters, if typewritten, which states:

Under Minnesota law, a personal automobile insurance policy deleted text beginissued in Minnesotadeleted text end
mustnew text begin: (1)new text end cover the rental of this motor vehicle against damage to the vehicle and
against loss of use of the vehiclenew text begin; and (2) extend the policy's basic economic loss
benefits, residual liability insurance, and uninsured and underinsured motorist
coverages to the operation or use of a rented motor vehicle
new text end. Therefore, purchase of
any collision damage waiver or similar insurance affected in this rental contract is
not necessary deleted text beginif your policy was issued in Minnesotadeleted text end.new text begin In addition, purchase of any
additional liability insurance is not necessary if your policy was issued in Minnesota
unless you wish to have coverage for liability that exceeds the amount specified in
your personal automobile insurance policy.
new text end

No collision damage waiver or other insurance offered as part of or in conjunction with
a rental of a motor vehicle may be sold unless the person renting the vehicle provides a
written acknowledgment that the above consumer protection notice has been read and
understood.

(g) When damage to a rented vehicle is covered by a plan of reparation security as
provided under paragraph (a), the rental contract must state that payment by the reparation
obligor within the time limits of section 72A.201 is acceptable, and prior payment by
the renter is not required.

(h) Compensation for the loss of use of a damaged rented motor vehicle is limited to
a period no longer than 14 days.

(i)(1) For purposes of this deleted text beginparagraphdeleted text endnew text begin subdivisionnew text end, "rented motor vehicle" means a
rented vehicle described in paragraph (a), using the definition of "rented" provided in
paragraph (b).

(2) Notwithstanding section 169.09, subdivision 5a, an owner of a rented motor
vehicle is not vicariously liable for legal damages resulting from the operation of the
rented motor vehicle in an amount greater than $100,000 because of bodily injury to one
person in any one accident and, subject to the limit for one person, $300,000 because of
injury to two or more persons in any one accident, and $50,000 because of injury to or
destruction of property of others in any one accident, if the owner of the rented motor
vehicle has in effect, at the time of the accident, a policy of insurance or self-insurance, as
provided in section 65B.48, subdivision 3, covering losses up to at least the amounts set
forth in this paragraph. Nothing in this paragraph alters or affects the obligations of an
owner of a rented motor vehicle to comply with the requirements of compulsory insurance
through a policy of insurance as provided in section 65B.48, subdivision 2, or through
self-insurance as provided in section 65B.48, subdivision 3new text begin, which policy of insurance or
self-insurance must apply whenever the operator is not covered by a plan of reparation
security as provided under paragraph (a)
new text end
; or with the obligations arising from section
72A.125 for products sold in conjunction with the rental of a motor vehicle. Nothing in
this paragraph alters or affects liability, other than vicarious liability, of an owner of
a rented motor vehicle.

(3) The dollar amounts stated in this paragraph shall be adjusted for inflation
based upon the Consumer Price Index for all urban consumers, known as the CPI-U,
published by the United States Bureau of Labor Statistics. The dollar amounts stated
in this paragraph are based upon the value of that index for July 1995, which is the
reference base index for purposes of this paragraph. The dollar amounts in this paragraph
shall change effective January 1 of each odd-numbered year based upon the percentage
difference between the index for July of the preceding year and the reference base index,
calculated to the nearest whole percentage point. The commissioner shall announce and
publish, on or before September 30 of the preceding year, the changes in the dollar
amounts required by this paragraph to take effect on January 1 of each odd-numbered
year. The commissioner shall use the most recent revision of the July index available as
of September 1. Changes in the dollar amounts must be in increments of $5,000, and no
change shall be made in a dollar amount until the change in the index requires at least
a $5,000 change. If the United States Bureau of Labor Statistics changes the base year
upon which the CPI-U is based, the commissioner shall make the calculations necessary
to convert from the old base year to the new base year. If the CPI-U is discontinued, the
commissioner shall use the available index that is most similar to the CPI-U.

(j) The plan of reparation security covering the owner of a rented motor vehicle is
excess of any residual liability coverage insuring an operator of a rented motor vehicle deleted text beginif
the vehicle is loaned as a replacement for a vehicle being serviced or repaired, regardless
of whether a fee is charged for use of the vehicle, provided that the vehicle so loaned is
owned by the service or repair business
deleted text end.