Senate panel rejects bill that would let renters’ policies be primary after rental‑car crashes

The Senate Transportation Committee on Tuesday failed to advance legislation that would let a renter’s personal automobile insurance be primary in collisions involving rental vehicles, a change proponents said would make the person who caused an accident pay first and critics warned could shift risk to in‑state insurance pools.

David Owens, who described the bill’s provisions for the committee, said S1036 would allow a renter to "agree that in the event of an automobile accident involving a rental car, the renter's automobile insurance would be primary," meaning the renter's policy would pay up to its limits before the rental company’s insurance would contribute.

Senator Blackman, a sponsor, said the concept already exists in several other states and "is not a new and novel concept," and argued the change would mainly shift costs to out‑of‑state drivers who rent here for short trips such as quail hunting. "It's going to be their dollars that are going to be covering these accidents instead of our dollars on a local level," Blackman said.

Other members pressed on whether the change would raise premiums for South Carolina policyholders who do not rent cars. Senator Charleston asked whether "this tend[s] to increase the insurance premium on every South Carolinian?" and warned insurers would have to price in additional uncertainty if policyholders might choose the new option at the point of rental.

Enterprise representative TJ Watkins told the committee that renters already have a clear choice when they pick up a vehicle: they may accept supplemental coverages sold by the rental company or decline and rely on their own carrier. "You have the option for supplemental liability," Watkins said. "We're going to cover the minimum financial responsibility for a vehicle. You have an option for additional coverages above that."

Committee members also reviewed letters the panel had received from the South Carolina Insurance Association and from Enterprise. Committee testimony included an industry estimate, attributed in discussion to a national insurer data set, that the bill’s change would affect roughly $9,000,000 of claims in South Carolina out of a roughly $1.718 billion claims base — "less than a half a percent" of claims volume, per the figures cited to the committee.

Despite that estimate, members remained split on how insurers would react in pricing. "If you caused an accident, whether in your car or rental car, your insurance rates are probably going to go up to cover that," one insurance witness said, adding that the effect on premiums is uncertain.

After debate and a roll call-style count that included proxies, the chair announced the motion for a favorable report had failed. The committee noted five votes in favor and six opposed (including two proxies voting in favor), and the motion was defeated.

The committee did not adopt any amendments to change the bill’s core allocation of primary liability. With the motion for a favorable report defeated, S1036 will not move from the committee at this time.

The Transportation Committee’s next procedural items included several specialty license‑plate measures and a driver‑license amendment, which the committee approved as amended.