Car Rental Companies Now Secondary in Arizona Liability Coverage

The American Car Rental Association (ACRA) and the industry scored a major victory this year in Arizona, where the state's Legislature passed and the governor signed SB 1153, which effectively puts the rental car owner in a secondary liability position. 

Under previous law, Arizona was one of only a handful of states that required the rental company’s insurance — or self-insurance — to pay first in any third-party claims up to the state minimum requirements. Under SB 1153, the renter’s insurance will be required to pay first, if the rental contract discloses this and the renter acknowledges the requirement. 

The new law takes effect July 1.

ACRA and several of its member companies worked with the insurance industry to address several of their concerns.  In the end, ACRA reports that it was a good process and that the voice of the rental car industry was heard. "We hope to build upon this momentum and pursue similar law changes in the states where the rental car company remains primary," the association said in a prepared statement.

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