AB 207

This bill specifies the circumstances under which a vehicle rental company is

subject to the minimum liability insurance policy limits applicable for motor carriers,

rather than the standard policy limits applicable to most vehicles.

Current law provisions relating to motor vehicle insurance requirements

require a lessor or rental company to have on file with the Department of

Transportation proof of motor vehicle liability insurance as a prerequisite to renting

or leasing a motor vehicle for compensation. The minimum policy limits required for

this insurance are, for each accident, $25,000 for bodily injury or death to one person

and $50,000 for bodily injury or death to more than one person, as well as $10,000

for property damage. For purposes of these provisions, a “lessor" and a “rental

company" are defined as a person who, for compensation, leases or rents,

respectively, a motor vehicle to a lessee or renter to be operated by or with the consent

of the lessee or renter or who acquires a contract for the leasing or renting of a motor

vehicle from another person.

Current law provisions relating to motor carriers also require a rental company

to have on file with DOT proof of motor vehicle liability insurance as a prerequisite

to registering a motor vehicle or obtaining a motor carrier operating permit. The

minimum policy limit required for this insurance is generally an amount specified

under federal law (generally $750,000), but for a vehicle with a gross weight of not

more than 10,000 pounds that is not transporting hazardous materials it is $300,000.

Current law does not define the term “rental company" for purposes of these motor

carrier insurance provisions.

This bill creates a definition of “rental company" for purposes of these motor

carrier insurance provisions. The bill defines a “rental company" as a person that

rents motor vehicles to common motor carriers of property, contract motor carriers,

or private motor carriers transporting hazardous materials. The bill also specifies

that these motor carrier insurance provisions are applicable only to a rental

company's vehicles that are rented to a common motor carrier of property, contract

motor carrier, or private motor carrier transporting hazardous materials.