November 16, 2000

INSURANCE INFORMATION NOTICE NO. 2001-2

SUBJECT: RENTED MOTOR VEHICLES AND/OR COURTESY VEHICLES

Rented Motor Vehicles

Per the State Travel Regulations (P.P.M. 49), a State employee cannot be reimbursed their expenses for “any personal mileage or rental days on a vehicle rented for official State business …”. The State Office of Risk Management (ORM) will not pay for liability or physical damage claims when the vehicle is not used on official State business. When you are going to use a rental vehicle for personal use, ORM suggests that you purchase the liability and physical damage coverage from the rental company. The expense for liability and physical damage coverage for an automobile shall be the expense of the traveler, and also is not a reimbursable expense according to the Travel Regulations. Otherwise, an accident could cause the traveler to pay expenses out of his/her own pocket. ORM suggests you check with your personal insurance agent/broker to determine your exposure prior to making a trip when you might use a rented vehicle for personal use. ORM does provide automobile liability and physical damage coverage when the rented motor vehicle is used on official State business.

Courtesy Vehicles

If your agency has a courtesy car that is used on official state business only, ORM will provide both automobile liability and physical damage coverage for this borrowed vehicle. ORM will not provide coverage for a courtesy car, if at the time of the accident, it is being used for personal use. If you are operating a courtesy vehicle or any other borrowed vehicle and an accident occurs, a claims adjuster will investigate the claim to determine if the vehicle is being used on official state business. If the vehicle is not being used on official State business, ORM will deny coverage. ORM recommends that you get the individual driver of the courtesy or borrowed vehicle to add it to their personal insurance policy prior to taking possession of the vehicle if it will be used for personal use. ORM recommends that you review the State Travel Regulations to determine the State’s policy on vehicle use and who is an authorized driver. This information can be obtained on the Internet at doa.louisiana.gov/osp/travel/traveloffice.htm and go to PPM49.

Also, please be advised that the State’s insurance policies for automobile coverage do not provide coverage for a vehicle leased, hired, rented or borrowed with a driver.

If you have any questions, please contact Tommy Arbour at (225) 342-8414.