SENATE BILL 132

53rd legislature - STATE OF NEW MEXICO - second session, 2018

INTRODUCED BY

John M. Sapien

AN ACT

ENACTING THE PRIVATE VEHICLE RENTAL ACT; PROVIDING REQUIREMENTS FOR FACILITATING THE RENTAL OF PRIVATELY OWNED MOTOR VEHICLES AND FOR INSURING THOSE VEHICLES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Private Vehicle Rental Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Private Vehicle Rental Act:

          A. "authorized insurer" means an insurer holding a valid and subsisting certificate of authority, issued by the superintendent of insurance, to transact insurance in this state;

          B. "eligible surplus lines insurer" means a qualified nonadmitted insurer with which a surplus lines broker may place surplus lines insurance pursuant to Section 59A-14-4 NMSA 1978;

          C. "insurance" means a contract whereby one undertakes to pay or indemnify another as to loss from certain specified contingencies or perils, or to pay or grant a specified amount or determinable benefit in connection with ascertainable risk contingencies, or to act as surety;

          D. "insurer" means a person engaged as a principal and as indemnitor, surety or contractor that is in the business of entering into contracts of insurance;

          E. "motor vehicle" means a self-propelled vehicle subject to registration pursuant to Section 66-3-1 NMSA 1978 for use on the public streets and highways that has at least four wheels and a gross vehicle weight of ten thousand pounds or less, but does not include a vehicle used in commerce to transport passengers or property;

          F. "owner" means the registered owner of a private rental vehicle;

          G. "person" means an individual, corporation, business enterprise or other legal entity;

          H. "private rental vehicle" means a motor vehicle that is owned by and registered to an individual and is available for rent through a provider;

          I. "provider" means a person that facilitates the rental of a private rental vehicle owned by another person through the ownership and operation of a digital network or other system;

          J. "rental period" means the time period that begins when an owner transfers control of the owner's private rental vehicle to a provider and ends when the owner regains control of the owner's private rental vehicle; and

          K. "renter" means a person who obtains the use of a private rental vehicle.

     SECTION 3. [NEW MATERIAL] FINANCIAL RESPONSIBILITY OF PRIVATE VEHICLE RENTAL PROVIDERS.--

          A. A provider shall maintain during the rental period for each private rental vehicle for which the provider facilitates a rental:

                (1) liability insurance coverage at least equal to that required by the Mandatory Financial Responsibility Act;

                (2) uninsured and underinsured motorist coverage at least equal to that required by Section 66-5-301 NMSA 1978; and

                (3) physical damage coverage, including collision and other than collision protection; provided that a provider may contractually agree to indemnify an owner for damage to the private rental vehicle arising during the rental period.

          B. A provider licensed as a rental car agent under the Rental Car Insurance Limited Producer License Act satisfies the requirements of this section if the provider sells rental car insurance on the private rental vehicle that provides coverage equivalent to that required pursuant to Subsection A of this section.

          C. A provider shall provide proof of compliance with this section, in a form approved by the secretary of taxation and revenue, to the owner prior to the rental period and maintain that proof of compliance in the private rental vehicle throughout the rental period.

          D. Insurance required by this section shall be obtained from an authorized insurer or eligible surplus lines insurer.

          E. Insurance satisfying the requirements of this section satisfies the insurance requirements of the Mandatory Financial Responsibility Act during the rental period, except that the insurance shall not be used in connection with the registration of a private rental vehicle.

     SECTION 4. [NEW MATERIAL] LIABILITY PROVISIONS.--

          A. In addition to the insurance coverage required pursuant to Section 3 of the Private Vehicle Rental Act, a provider shall maintain insurance that covers liability and physical damage during the rental period, unless the private rental vehicle is covered by rental car insurance.

          B. A provider is deemed the owner for purposes of liability or loss arising during the rental period for a private rental vehicle, unless the private rental vehicle is covered by rental car insurance. The provider is liable during the rental period regardless of a lapse in the insurance under which the provider is insured or whether that insurance covers the liability or loss.

          C. An insurer providing insurance as described in this section is liable for a claim when a dispute exists as to who was in control of the private rental vehicle at the time of the incident giving rise to the claim. The owner's motor vehicle insurer shall indemnify the provider's insurer to the extent of its obligation under the applicable insurance policy if it is determined that the private rental vehicle was under the control of the owner at the time of the incident giving rise to the claim. The provider shall notify the owner's insurer of a dispute within ten business days of becoming aware of the dispute.

          D. An owner is not liable or subject to civil action, and the provider's insurer shall indemnify and hold the owner and the owner's insurer harmless, for a loss arising during the rental period.

     SECTION 5. [NEW MATERIAL] INSURANCE COVERAGE DISCLOSURES.--A provider shall disclose in writing to the owner and renter prior to a private vehicle rental that:

          A. the owner's motor vehicle insurance on the private rental vehicle is not required to provide coverage, and the owner's insurer is not required to defend or indemnify any person or organization, for liability or loss that arises during the rental period;

          B. the provider maintains insurance coverage for the rental period, including a list of the types of coverage and the limits for each type of coverage; and

          C. the provider's insurance policy is not required to provide coverage outside the rental period.

     SECTION 6. [NEW MATERIAL] SIGNAGE AND EQUIPMENT-- RESPONSIBILITY.--

          A. A provider shall install, operate and maintain at no cost to the owner any signage or computer hardware or software necessary for a private rental vehicle. The provider shall indemnify and hold harmless the owner for damage to or theft of signage or computer hardware or software installed in the private rental vehicle and for damage to the private rental vehicle as a result of installation, operation, maintenance or theft.

          B. A provider shall, to the extent records are collected, maintain for at least four years following a rental period and make available at no cost to a state agency, the owner, the owner's insurance provider, the renter or the renter's insurance provider:

                (1) records of each rental period, including:

                     (a) the time the provider obtained the private rental vehicle from or returned its control to the owner;

                     (b) the initial, final and continuous location of the private rental vehicle; and

                     (c) miles driven; and

                (2) information relevant to a claim or potential claim regarding damages or injuries arising during the rental period.

     SECTION 7. [NEW MATERIAL] STANDING TO OBTAIN INSURANCE.-- A provider is deemed to have an actual, lawful and substantial economic interest in the safety and preservation of a private rental vehicle available for rent through the provider for the purpose of obtaining insurance.

     SECTION 8. [NEW MATERIAL] INSURANCE FOR PRIVATE VEHICLE RENTAL PROGRAMS.--

          A. An insurer or eligible surplus lines insurer may issue an insurance policy that covers the:

                (1) provider, its agents, employees, directors, officers and assigns; and

                (2) renter, authorized drivers and occupants of a private rental vehicle.

          B. A policy issued pursuant to this section shall:

                (1) provide first party coverage, liability, property, comprehensive, collision and uninsured and underinsured motorist coverage for the private rental vehicle and the vehicle's owner, renter, authorized operator and occupant for claims arising during the rental period;

                (2) be primary with respect to other insurance available to the renter, authorized operator or occupant of the private rental vehicle;

                (3) identify the provider as the named insured;

                (4) include coverage for the rental period without requiring that the provider give the insurer prior notice of the vehicle identification number or other identifying information for the covered private rental vehicle;

                (5) provide, at a minimum, the levels of coverage required for a motor vehicle insurance policy issued in compliance with the Mandatory Financial Responsibility Act; and

                (6) comply with the provisions of the Mandatory Financial Responsibility Act and the Private Vehicle Rental Act.

     SECTION 9. [NEW MATERIAL] DISCRIMINATION BASED ON USE OF A MOTOR VEHICLE FOR PRIVATE VEHICLE RENTAL.--

          A. An insurer shall not deny, cancel, fail to renew or raise the rate of a motor vehicle insurance policy solely because a motor vehicle is available for rent under the Private Vehicle Rental Act.

          B. An insurer may deny, cancel or refuse to renew a motor vehicle insurance policy for a motor vehicle available for rent pursuant to the Private Vehicle Rental Act if the cost or provision of the motor vehicle insurance coverage is based on usage information obtained through monitoring acceleration, braking, miles driven or other indicia of driving behavior. If the insurer denies, cancels or refuses to renew the motor vehicle insurance policy, the insurer shall immediately offer the insured or applicant a motor vehicle insurance policy with equivalent coverage that is not based on usage information obtained through monitoring acceleration, braking, miles driven or other indicia of driving behavior.

     SECTION 10. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2018.

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