In the current 2022 session of the Louisiana legislature, there is a proposed bill, House Bill 870, that would require all insurers to provide coverage when any insured is driving a non-owned vehicle with the permission of the vehicle’s owner.

HB 870 a Response to Louisiana Supreme Court Decision

The proposed legislation is in direct response to the Louisiana Supreme Court’s recent decision in Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), 2022 WL26303. In Landry, the Louisiana Supreme Court upheld a provision in an insurance policy which restricted the definition of a “non-owned” vehicle to those vehicles: 1) used as a temporary substitute for the covered auto which was out of normal use because of breakdown, repair, servicing, loss or destruction; 2) rented by an insured; or 3) being test driven by the insured. Essentially, the insurer sought to severely limit when its insured would be covered when driving someone else’s vehicle with permission. Unless the vehicle was a rental vehicle or a test-drive vehicle, the only time the insured would be covered when driving someone else’s vehicle is if the insured’s own vehicle was out of service due to damage, breakdown, service or repair.

Traditionally, auto policies written in Louisiana had provided broad coverage for the insured’s operation of another vehicle if being operated with the permission of the owner. The Louisiana Supreme Court, in upholding the policy definition, noted that there is no public policy in Louisiana that requires automobile insurance liability coverage for a defendant driver’s negligent operation of a non-owned vehicle.

What HB 870 Would Require of Louisiana Insurers

In response to the Landry decision, House Bill 870 has been introduced in the Louisiana Legislature and, if passed, would require coverage when the insured is operating a non-owned vehicle with the express or implied permission of the vehicle’s owner. The statute is designed to provide coverage for non-owned vehicles that are provided to the insured on a temporary basis, so the statute does not require coverage for vehicles that are provided, furnished or available to the insured on a regular basis. The bill was unanimously passed in the House, and now moves to the Senate for passage. If the bill is passed, Louisiana insurers would be required to provide coverage when its insureds are temporarily driving someone else’s vehicle with permission.