Sometimes important regulatory and tort reforms come in small packages. One example is SB1286, sponsored by Senator John McComish. It proposes a simple reform to insurance law, which currently requires a completely innocent car rental company and a completely negligent car renter to be equally responsible for paying for injuries caused by the renter.
It’s plain to see why this law is on the books: car rental companies have the ability to pay much bigger insurance claims than most people. In contrast to this “deep pockets” approach, SB1286 puts primary responsibility for negligent driving on the shoulders of the driver and his insurance company, rather than the company that rents him the car.
The bill changes the law to say that the renter’s insurance is primarily responsible to compensate for injuries the renter negligently causes. Only once the negligent renter’s insurance is exhausted, will an injured person be able to seek money from the innocent car rental company. That makes a lot more sense. Having deep pockets isn’t a legitimate reason to make car rental companies pay for injuries caused by people who rent cars.
By putting the primary duty to compensate for an injury on the person responsible for the injury, SB1286 is a reasonable tort reforms that still protects people who are legitimately injured. It also illustrates how meaningful regulatory reform can often be achieved by correcting bad policy found in the nooks and crannies of Arizona law. By reducing the cost of doing business in Arizona, rental car companies will be able to pass along the savings to consumers, employees and shareholders.
SB1286 proves that important reforms don’t always require a grand vision. Significant opportunities to advance freedom and personal responsibility can often be found on the margins.
Arizona State Legislature: Senate Bill 1286