insurance; rental cars
HB 2072 amends Arizona statute by designating the insurance policy of the driver as primary coverage for liability loss in rented vehicles.
A strike-everything amendment on motor
vehicle liability coverage will be offered in the Committee on Financial
Institutions and Insurance.
The Ninth Circuit Court of Appeals addressed a court case (Bills v. United States Fidelity and Guaranty Company) which held that under Arizona law and on the right set of facts, uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) will be imputed into a standard Commercial General Liability (CGL) insurance policy. The case involved an employee who was injured by an uninsured motorist while performing the scope of his duties. The employee utilized a front loader as an alert signal for oncoming traffic. The vehicle was not in operation or powered by the employee. Arizona’s Uninsured Motorist Act requires that an insurer offer UM and UIM coverage to an insured that purchases any policy which supplies primary coverage for a motor vehicle. However, statute provides an exemption from the requirement of offering UM or UIM coverage in connection with any general commercial liability policy that does not provide primary motor vehicle insurance for liabilities involving the use of a specifically insured motor vehicle. At question in this decision was the definition of motor vehicle and the circumstances which led to imputing the UM/UIM coverage. Statute (A.R.S. § 28-4001(3)) defines motor vehicle as a self-propelled vehicle that is registered under the laws of the state. A.R.S. § 28-101(29) is a general definition that simply characterizes a motor vehicle as a self-propelled vehicle. The court applied the broader definition and determined that UM/UIM was applicable for construction and farm equipment, such as the front loader referenced in the case. The proposed legislation amends state law to reflect the court decision by referencing the definition provided in A.R.S. § 28-4001(3). This would clarify that UM and UIM coverage would be applicable for CGL policies involving registered vehicles that operate on the highways of the state.