Sometimes important regulatory and tort reforms come in small packages. One example is SB1153, sponsored by Senator Andy Biggs. It proposes a simple reform to insurance law, holding responsible a negligent car renter to pay for injuries or damages he's caused.
Under current law, there is no personal responsibility required when it comes to operating a rental car. Right now, rental car companies in Arizona are forced to cover the costs of injury and damage caused by the renter, even when the renter is at fault and has insurance.
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 currently in place, SB 1153 restores a more equitable balance, placing the 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 a rental car company can recover from the negligent renter claims paid for damages and injuries that the negligent renter caused.
Currently, Arizona is the lone state in the nation that is specifically prohibited in state statutes from recovering claims they’ve paid out on behalf of negligent drivers. Who has the most money should not be the litmus test for determining who covers the costs of damages and injuries in a car accident. The person who should be footing the bill is the person responsible for the negligent action that caused the accident.
By putting the duty to compensate for damage or injury on the person responsible, SB1153 is a reasonable tort reform 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.
SB1153 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.