Phoenix, AZ (PRWEB) February 24, 2012
A piece of legislation currently being considered by the Arizona Senate is generating strong support from rental car agencies, who stand to have their liability reduced by the bill, and is stoking just as strong opposition from personal car insurers, who would see an influx of damage claims if it’s signed into law, according to Online Auto Insurance.
The bill, SB 1286, would make it so that rental agencies’ commercial coverage policies would kick in after an accident only if the renters’ own insurance is exhausted or if they don’t have any coverage at all.
Rental agencies’ liability policies are currently the primary coverage for damages caused by renters.
According to one industry group—the Property Casualty Insurers Association of America (PCI)—passage of the bill could have a trickle-down effect and ultimately hurt the availability of low cost auto insurance in the state.
By making renters’ policies the primary coverage while they’re behind the wheel, the lion’s share of liability for damages from accidents involving rental cars in the state would shift from agencies’ commercial insurers to policyholder’s personal coverage providers.
That could mean a lot more accident claims being filed under personal policies. And when losses for a certain coverage type increase, it’s likely that an insurer will raise the rates for policyholders who have that type of coverage.
The PCI has said in a statement that this cost shift could end up being in the millions of dollars.
Representatives from the PCI and a handful of the largest vehicle insurers in the state all have given public testimony in opposition of the bill.
The legislation is not yet up for a full vote from the Senate.
It received approval from the Senate Banking and Insurance Committee, but not with an overwhelming margin. The committee vote to pass the bill on to the full Senate was 4-2.
For more on this and other car insurance issues, head to http://www.onlineautoinsurance.com/low-cost/ to access informative resource pages and a helpful rate-comparison generator that shoppers can use to find the best rates on a policy.