Imagine the following scenario: you are involved in a fender-bender in the parking lot of the grocery store. Your car is taken to the body shop for repairs. Since you need transportation to get to work and other places in the mean time, you rent a car from the local agency. When picking up the car, you’ll no doubt be offered liability insurance through the agency–at an additional cost, of course. There may also be coverage available through the credit card you use to pay for the rental. And then there is the policy you maintain on your regular car. Does it extend coverage to the rental?
Louisiana law recognizes a “temporary substitute vehicle,” which is commonly defined by insurance companies as a short-term substitute for a car that is out of service due to breakdown, repair, servicing, theft, or destruction. State statute requires automobile insurance companies to “extend to temporary substitute motor vehicles … any and all such insurance coverage in effect in the original policy.” La. R.S. 22:681. In other words, the auto insurer must provide the same coverage to the rental car as was already in place on the regular vehicle.
The recent case of Smith v. Louisiana Farm Bureau Casualty Insurance Company, No. 45,013, Ct. of App. of La., 2d Cir. (2010), explored the definition of “temporary substitute vehicle” in detail. On the morning of May 28, 2005, Brian Smith was driving a 2003 Nissan Altima on U.S. Highway 425 in Morehouse Parish. At the same time, Joshua Pruett was driving a 1998 Dodge Ram pickup truck on the highway in the opposite direction. Pruett’s truck was pulling a utility trailer containing crawfish and ice that had been loaded in Crowley. The ball on the truck’s trailer hitch was too small for the trailer and Pruett did not use any safety chains to ensure that the trailer remained attached to the truck. The trailer eventually disconnected from the truck, at which point it crossed the highway’s center line and collided with Smith’s Altima. Smith died at the scene from the severe trauma he sustained in the accident.