Bill would require renters to prove personal auto insurance to close rental-car loophole, industry tells Nevada committee

The Assembly Committee on Growth and Infrastructure heard testimony on Senate Bill 194, which proposes to amend NRS 482.31565 to require drivers who take a short-term lease of a passenger car to provide proof of personal automobile insurance that meets Nevada’s minimum statutory requirements.

Brent Quist, general counsel for Malco Enterprises (doing business as Budget Car and Truck Rental), told the committee the bill addresses a practice in which renters use short-term rentals as a long-term substitute for personal vehicle ownership and insurance. Quist said the current statutory framework prevents rental companies from requiring renters to buy personal automobile insurance and that the bill would permit rental companies to require proof of personal insurance or to verify other short-term coverage options. Quist summarized the proposed change: "Senate Bill 194 amends NRS 482.31565 by requiring that renters provide proof of applicable personal automobile insurance that meets or exceeds Nevada's minimum automobile insurance requirements."

Quist and other industry witnesses described three ways the requirement could be satisfied: proof of the renter's personal automobile insurance policy; spot insurance purchased for the rental period; or supplemental renter liability insurance sold by the rental company. The bill would expressly allow rental companies to refuse to rent a vehicle to a person who cannot provide qualifying proof of insurance.

Supporters argued the measure would ensure responsible parties are financially liable for accidents and reduce the economic burden on rental companies and repair businesses when uninsured drivers cause accidents. The Nevada Franchise Auto Dealers Association said the bill would address uninsured drivers using rental vehicles for extended periods.

Committee members asked about verification of out-of-state policies and the administrative burden on counter staff. Industry witnesses said technology exists to verify insurance in real time and that online rental flow could notify visitors in advance what documentation to bring. Assemblymember Backus and others raised concerns that an insurance card or short proof might not reflect policy language about coverage limits in another state; sponsors and industry asked for follow-up work to clarify verification procedures. Senator Melanie Scheibel, sponsor, noted subsection language meant to require that insurance sold at the counter be offered "at the market rate" and said the bill was intended to prevent rental companies from charging exorbitant fees and to ensure adequate coverage for drivers on Nevada roads.

The committee heard no opposition testimony and no vote was taken at the hearing. Staff and industry representatives said they would continue to refine verification and consumer-protection details.