Modifying priority of insurance coverage for drivers of certain vehicles provided by entities
SB556 amends West Virginia’s insurance code to change how liability and other motor vehicle coverage is prioritized when a driver is using a vehicle provided by a business engaged in selling, repairing, leasing, or servicing motor vehicles. The bill generally makes the driver’s own available motor vehicle insurance primary, and the business owner’s coverage secondary, when the driver is using a replacement vehicle provided while the driver’s own vehicle is being repaired or serviced and no separate consideration is paid for the use of the vehicle.
The bill also creates an exception for employees of those businesses: if an employee is driving a business-owned vehicle with permission and within the scope of employment, the business’s liability insurance remains primary and the employee’s coverage is secondary. In addition, for rental and leasing situations, the bill states that the security maintained by the rental, leasing, selling, repairing, or servicing business is secondary to the driver’s own available insurance, except where the rental or leasing company sells additional insurance for separate consideration, which remains primary.
SB556 amends §33-6-29 of the West Virginia Code and affects the order in which insurance policies respond to claims involving loaner, replacement, rental, leased, and service-related vehicles. It shifts financial responsibility away from the vehicle-owning business in many situations and toward the driver’s personal auto policy, while preserving primary coverage for business-owned insurance in employee-on-duty scenarios and for separately purchased rental or leasing coverage. The change will affect insurers, auto dealers, repair shops, service centers, rental car companies, leasing companies, and drivers who use temporary replacement vehicles.
The bill appears to have been broadly supported and moved through both chambers with no recorded opposition in the Senate and a substantial House majority. The Senate passed it unanimously after amending the title, and the House approved it by a wide margin, suggesting general agreement on the need to clarify insurance priority rules for these vehicle-use arrangements. No committee testimony was provided, so the available record shows a largely favorable legislative reception without detailed public debate in the materials provided.
The main policy issue is who should bear primary insurance responsibility when a customer, renter, or borrower is driving a vehicle supplied by a business. Supporters likely favored clearer allocation of coverage and reduced exposure for vehicle businesses and their insurers, while any concerns would center on shifting costs to drivers’ personal policies and the potential for disputes over when a vehicle is a replacement vehicle, whether separate consideration was paid, and whether an employee was acting within the scope of employment. The bill resolves these questions by drawing specific distinctions among replacement vehicles, employee use, and separately purchased rental or leasing coverage.