GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	2 

HOUSE BILL 295
Committee Substitute Favorable 5/9/95

Short Title:  Rental Car Ins./Priority Claims.	(Public)

─────────────────────────────────────── 
Sponsors:

─────────────────────────────────────── 
Referred to:  

─────────────────────────────────────── 

February 23, 1995

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH PRIORITY FOR PAYMENT OF LIABILITY CLAIMS FOR RENTAL CARS UNDER CERTAIN CIRCUMSTANCES.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 20 of the General Statutes is amended by adding the following new section to read:
"§ 20-279.21A.  Priority for payment of liability claims involving motor vehicles owned by rental car companies.
(a)	As used in this section, unless the context clearly requires otherwise, the term:
(1)	'Authorized operator' means the person or persons authorized by the rental car company to operate the vehicle under the terms of a rental contract.
(2)	'Motor vehicle liability policy or policies' means the same as defined in G.S. 20-279.21(a), and includes any other form of financial responsibility that meets the requirements of this Article.
(3)	'Rental car company' means an entity engaged in the business of renting vehicles in this State to the general public for a period of 30 days or less.
(4)	'Rental contract' means a written agreement, but not a lease, under which one or more persons named in the contract are authorized by the rental car company to operate the vehicle under the terms of the contract.
(5)	'Vehicle' means a motor vehicle of the private passenger type including passenger vans and minivans that are primarily intended for transport of persons and trucks used primarily for transport of cargo or persons.
(b)	When a vehicle owned by a rental car company and subject to Article 11 of this Chapter is rented to a person under a rental contract and is operated by an individual not authorized under the contract to operate the vehicle, priority for payment of claims involving the vehicle for which the unauthorized operator is liable shall be as follows:
(1)	The unauthorized operator of the vehicle, regardless of whether the authorized operator gave permission to the unauthorized operator to operate the vehicle.  If the unauthorized operator either is not covered by a motor vehicle liability policy or does not satisfy a settlement or judgment regarding the claim, then,
(2)	The rental car company.  If the rental car company has not complied with Article 11 of this Chapter or does not satisfy a settlement or judgment regarding the claim, then,
(3)	The authorized operator, if the authorized operator permitted the unauthorized operator to operate the vehicle at the time of the incident giving rise to the claim.
If the limits of coverage payable under a policy or policies, if applicable, or the assets of any person liable, under this subsection are insufficient to fully cover the loss, the amount by which the loss exceeds those limits and assets shall be due from the next person specified in this subsection."
Sec. 2.  This act becomes effective October 1, 1995, and applies to all policies written on or after that date.  This act expires October 1, 1999.