§431:10C-303.5  U-drive insurance policy; primary.  (a)  A U-drive motor vehicle insurance policy shall be primary; provided that its bodily injury and property damage liability coverages shall be secondary to the operator's or renter's motor vehicle insurance policy if:

     (1)  The U-drive rental business provides any claimant or person sustaining accidental harm or damages, as a result of the operation of the rental vehicle, the identity and address of the operator or renter, along with any information available to the U-drive rental business as to the identity and address of any insurer under any liability policies applicable to the operator or renter; provided that the U-drive rental business shall make reasonable efforts to obtain such information;

     (2)  A suit may be filed and service upon the responsible operator or renter can be effectuated; and

     (3)  An insurer responds on behalf of the operator or renter to a claim or suit.

     (b)  In cases where the U-drive motor vehicle insurance policy is primary because of:

     (1)  A failure of a renter or operator to cooperate with the U-drive rental business in providing the information described in subsection (a)(1);

     (2)  The failure to file suit and effectuate service as described in subsection (a)(2); or

     (3)  The failure of an insurer to respond as described in subsection (a)(3) or defend a claim or pay required benefits or a judgment;

the U-drive rental business may recover from the renter, operator, or insurer, the sums the U-drive rental business expended in payments or benefits, along with reasonable attorneys' fees and expenses. [L 1997, c 251, pt of §2; am L 1998, c 275, §20]


Case Notes


  Even if certain defendants were secondarily liable, this statute seemed to preclude such a finding until after plaintiff had prosecuted claims against the vehicle renter's auto insurance company, the primary source of coverage for bodily injury and property damages.  Plaintiff's bodily injury and property damage claims against those defendants should be dismissed without prejudice; plaintiff must first pursue an action against the insured vehicle renter.  255 F. Supp. 2d 1149 (2003).

  Rent-a-car company's rental agreement provision, which attempted to shift primary responsibility for providing minimum insurance coverage to the renter's personal insurance policy, violated the public policy enumerated in this chapter.  88 H. 274, 965 P.2d 1274 (1998).

  The owner of a vehicle has the primary obligation to provide minimum coverage for the owned vehicle and this obligation may not be avoided through a unilateral contract with a permissive user of the vehicle.  88 H. 274, 965 P.2d 1274 (1998).

  Where section does not expressly indicate an intent to be applied retroactively and retroactive application would have increased obligations of permissive user's insurance company, enactment of this section has no effect on causes of action arising before its effective date of January 1, 1998.  88 H. 274, 965 P.2d 1274 (1998).