Insurance policies must extend coverage to temporary substitute and rental vehicles, and rental companies must maintain security on rental vehicles unless specified conditions relieve that duty.
§1296. Coverage of temporary, substitute, and rental vehicles A. Every approved insurance company, reciprocal or exchange, writing automobile liability, physical damage, or collision insurance, shall extend to temporary substitute motor vehicles as defined in the applicable insurance policy and rental motor vehicles any and all such insurance coverage in effect in the original policy or policies. Where an insured has coverage on a single or multiple vehicles, at least one of which has comprehensive and collision or liability insurance coverage, those coverages shall apply to the temporary substitute motor vehicle, as defined in the applicable insurance policy, or rental motor vehicle. Such insurance shall be primary. However, if other automobile insurance coverage or financial responsibility protection is purchased by the insured for the temporary substitute or rental motor vehicle, that coverage shall become primary. The coverage purchased by the insured shall not be considered a collateral source. B. A rental company, as defined in R.S. 22:1762, shall maintain security on all rental vehicles meeting the requirements of the Motor Vehicle Safety Responsibility Law, R.S. 32:851 et seq., as follows: (1) Such security maintained by the rental company shall apply only when there is no other valid or collectible insurance or other form of security meeting the minimum financial responsibility requirements under the Motor Vehicle Safety Responsibility Law. (2) Notwithstanding a rental company's obligation to provide minimum financial responsibility pursuant to the Motor Vehicle Safety Responsibility Law as the owner of the vehicle for the privilege of registering and titling such vehicle, a rental company shall be relieved of any security obligation under the Motor Vehicle Safety Responsibility Law when the renter or driver has valid and collectible insurance, self-insurance, bond, deposit, or other form of security in an amount sufficient to satisfy the minimum financial responsibility requirements of the Motor Vehicle Safety Responsibility Law, when the claimant maintains uninsured or underinsured motorist coverage for bodily injury or property damage claims, or when the renter violates the terms or conditions of the rental agreement. (3) Nothing in this Section shall be construed: (a) To limit or restrict a rental company from providing by contract that the renter or driver shall assume responsibility for satisfying any and all duties and obligations for claims under the Motor Vehicle Safety Responsibility Law provided that the renter or driver has valid and collectible insurance, self-insurance, bond, deposit, or other form of security, which financial responsibility protection provided to the renter or driver shall be primary. (b) To limit the ability of a rental company to pursue the renter or driver of the rental vehicle for indemnity or contribution or both. (c) To create an obligation by the rental company to defend renters or drivers of rental vehicles. (d) To render a rental company subject to R.S. 22:1269, 1892, or 1892.2. (4) In the event that the rental company provides minimum financial responsibility limits pursuant to this Section, the rental company shall be exempt from R.S. 22:1295 and shall not be required to extend uninsured or underinsured motorist coverage or to offer renters or additional authorized drivers an opportunity to accept, reject, or select lower limits of uninsured or underinsured motorist coverage. Acts 2003, No. 456, §3; Acts 2007, No. 354, §1; Redesignated from R.S. 22:681 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2024, No. 3, §3, eff. July 1, 2024; Acts 2024, No. 770, §1.