Minnesota Session Laws - 1995, Regular Session

                            CHAPTER 225-S.F.No. 1204 
                  An act relating to insurance; no-fault auto; 
                  regulating rental vehicle coverages; determining when 
                  a vehicle is rented; modifying the right to 
                  compensation for loss of use of a damaged rented motor 
                  vehicle; providing for limits of vicarious liability 
                  for motor vehicle lessors; amending Minnesota Statutes 
                  1994, section 65B.49, subdivision 5a. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 65B.49, 
        subdivision 5a, is amended to read: 
           Subd. 5a.  [RENTAL VEHICLES.] (a) Every plan of reparation 
        security 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 must 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 plan.  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 equipment 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, 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 if:
           (1) if the rate for the use of the vehicle is determined on 
        a monthly, weekly, or daily basis.  A vehicle is not rented for 
        purposes of this subdivision if the rate for the vehicle's use 
        is determined on a monthly or longer period.; 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 or leased in this state 
        on a weekly or daily basis, 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 
           issued in Minnesota must cover the rental of this motor 
           vehicle against damage to the vehicle and against loss of 
           use of the vehicle.  Therefore, purchase of any collision 
           damage waiver or similar insurance affected in this rental 
           contract is not necessary if your policy was issued in 
           Minnesota. 
        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) To be compensated for the loss of use of a damaged 
        rented motor vehicle, the car rental company must prove: 
           (1) that had the vehicle been available, it would have been 
        rented; and 
           (2) that no other vehicle was available for rental in place 
        of the damaged vehicle. 
           The standard of proof set forth in this paragraph does not 
        limit the responsibility of a reparation obligor to provide an 
        insured with coverage for any loss of use for which the 
        reparation obligor is otherwise responsible.  A car rental 
        company may be compensated for loss of use of a damaged rental 
        motor vehicle only for the period when the damaged car actually 
        would have been rented.  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 paragraph, "rented motor 
        vehicle" means a rented vehicle described in paragraph (a), 
        using the definition of "rented" provided in paragraph (b). 
           (2) Notwithstanding section 170.54, 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 3; 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. 
           Sec. 2.  [EFFECTIVE DATE; APPLICATION.] 
           Section 1 is effective August 1, 1995.  The provision 
        relating to the determination of when a vehicle is rented 
        applies to plans of reparation security issued or renewed on or 
        after that date and the remainder of the act applies to causes 
        of action arising from incidents occurring on or after that date.
           Presented to the governor May 23, 1995 
           Signed by the governor May 25, 1995, 8:44 a.m.