Arizona Bill Removing Car Rental Companies as Primary Insurer Fails in House

Arizona Senate Bill 1286 that would’ve removed car rental companies as the primary insurer, failed in a House committee on March 12 in a 2-5 vote. The bill had already passed by a small margin in the state’s Senate in a 16-14 vote on March 1.

The proposed bill would’ve changed the state’s liability insurance coverage laws for motor vehicle rentals to say that a company’s insurance is “excess coverage to any other available insurance coverage for any damages and injury caused by a renter.” Currently, the law states that the public liability insurance or the obligation of a self-insured owner is the primary insurance provider.

The Arizona law, which was passed in 1997, means, for example, that a car rental company is the first source for insurance coverage if a renter gets into an accident and injures a third party, though additional liability may also be satisfied by the renter’s insurer. Only three other states have this type of statute: Delaware, Florida and Michigan.

To read the bill in its last form, click here.

— By Joanne M. Tucker

You can also check out a blog from Executive Editor Chris Brown on the Arizona bill when it was first introduced.

Comments

  1. Gil Cygler [ March 21, 2012 @ 07:11PM ]

    While the car rental industry is the immediate loser, the travelling and renting public suffers the most. Most people have coverage and they can not benefit which will force them to pay more for the rental of cars.

    It would be great if the Arizona car rental compaies would unite and present a unitfied front to the legislature explaining the merits of the case.

  2. Don [ May 26, 2012 @ 11:15AM ]

    No, the owner of a car should be the primary insurer of the car. Otherwise you will have uninsured renters on the highways. And why should personal insurance cover a car that depends on maintenance by someone else?

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