* This bulletin was repealed by 08-05


From:      Jay Angoff, Director

Re:          379.201 RSMo.

Date:       April 9, 1993

It has come to the Department's attention that in the instance of a loaned vehicle from a car dealership or repair facility that companies writing personal auto are not paying primary for any bodily injury liability, property damage liability or physical damage as required by statute.

Missouri statute section 379.201 states that "Every motor vehicle liability insurance policy insuring a motor vehicle licensed in this state must extend its liability coverage to include any other motor vehicle operated by the insured individual if the other motor vehicle is loaned, with or without consideration, (emphasis added) to the insured individual for demonstration purposes or as a replacement vehicle while the insured's vehicle is out of use because of a breakdown, repair, or servicing and if the other motor vehicle is loaned by a person, firm, or corporation engaged in the business of selling, repairing, or servicing motor vehicles. Such extension of liability coverage must include coverage for damage to the loaned vehicle."

This statute mandates companies to be the primary responsible party. Any coverage the dealership, garage or repair facility may have on the vehicle is secondary or excess coverage.

This statute also affirms that any damage to the loaned vehicle will be covered. This provision is required regardless if the insured driving the loaned vehicle has physical damage on their own vehicle or not.

Companies not providing primary coverage as required by statute are subject to market conduct review and any subsequent fines imposed as a result of an unfair claims practice.

If you have any questions, contact Jennifer Hart in the Property & Casualty Section at 314/751-3365