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Regular Session, 2011
HOUSE RESOLUTION NO. 115
BY REPRESENTATIVE CORTEZ
A RESOLUTION
To urge and request the Department of Insurance and the Louisiana Used Motor Vehicle
Commission to jointly study whether there is a need for mandated contingent
liability coverage for rental dealers and whether an adequate market for such
insurance exists in this state and to report their findings to the House Committee on
Insurance prior to the convening of the 2012 Regular Session of the Legislature of
Louisiana.
WHEREAS, Louisiana law, R.S. 32:793(D), requires rental dealers to maintain a
contingent automobile liability policy of insurance with minimum limits of one hundred
thousand dollars per occurrence, three hundred thousand dollars aggregate, and fifty
thousand dollars in property damage; and
WHEREAS, the cost of such a contingent automobile liability policy has become
prohibitive for rental dealers, particularly because this same law requires that such coverage
be obtained from admitted insurance carriers, if available, and insurers which offer this type
of coverage are very limited in number; and
WHEREAS, the market for such mandated coverage might be greatly expanded by
allowing rental dealers to obtain this coverage from surplus lines insurance carriers with
excellent ratings without exposing dealers or their customers to increased risk; and
WHEREAS, motor vehicle lessors, those who lease cars without the rent-to-own
option, are not required to maintain similar contingent liability coverage but are only
required by Louisiana law, R.S. 32:1254(J)(5), to maintain insurance coverage covering their
place of business and their operations that comply with the financial responsibility law of
this state and as determined by the dealer and his insurance agent; and
WHEREAS, the issue of mandated coverage for rental dealers as required by
Louisiana law has not been revisited since passage of the Safe, Accountable, Flexible, ENROLLEDHR NO. 115
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Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which contained
the Graves Amendment, by the United States Congress in 2005; and
WHEREAS, the Graves Amendment abolishes vicarious liability of companies that
rent or lease motor vehicles based on the negligent driving of their customers "if there is no
negligence or criminal wrongdoing on the part of the owner [that rents or leases vehicles]";
and
WHEREAS, such federal legislation may have the effect of preempting state laws
that impose such liability on motor vehicle renting and leasing companies; and
WHEREAS, the Department of Insurance has the authority to regulate the business
of insurance in this state and the Louisiana Used Motor Vehicle Commission is authorized
to regulate Louisiana rental dealers.
THEREFORE, BE IT RESOLVED that the House of Representatives of the
Legislature of Louisiana does hereby urge and request the Department of Insurance and the
Louisiana Used Motor Vehicle Commission to jointly study whether there is a need for
mandated contingent liability coverage for rental dealers and whether an adequate market
for such insurance exists in this state.
BE IT FURTHER RESOLVED that the Department of Insurance and the Louisiana
Used Motor Vehicle Commission jointly report their findings to the House Committee on
Insurance before convening of the 2012 Regular Session of the Legislature of Louisiana.
BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
commissioner of insurance and the executive director of the Louisiana Used Motor Vehicle
Commission.
SPEAKER OF THE HOUSE OF REPRESENTATI VES