Opinion ID: 1834936
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Heading: The Louisiana Motor Vehicle Safety Responsibility Law

Text: A. The Nature of Self-insurance Having concluded the prior jurisprudence involving the liability of rental agencies when the leased automobile is driven by an unauthorized driver in violation of the lease agreement offers us little guidance, a discussion of the nature of self-insurance under Louisiana law is necessary. The Louisiana Motor Vehicle Safety Responsibility Law [7] (LMVSRL) provides a mandatory, comprehensive scheme for the protection of the public from damage caused by motor vehicles. At the heart of this statutory scheme is the decision to attach the financial protection to the vehicle rather than to the operator. [8] Pursuant to La.R.S. 32:861(A), the owner of every motor vehicle registered in the state of Louisiana (with the exception of certain classifications of vehicles) is prospectively required to maintain proof of financial responsibility by: (1) purchasing a motor vehicle liability policy with limits which conform to the requirements of La. R.S. 32:900(B)(2) or a binder for the same; (2) posting a motor vehicle liability bond which satisfies the requirements of La.R.S. 32:861(B); (3) depositing with the state treasurer sufficient cash and securities under the provisions of La.R.S. 32:861(C); or (4) obtaining a certificate of self-insurance in accordance with the terms of La.R.S. 32:1042. It is important to understand that self-insurance is, in actuality, not insurance at all. It is merely one of the four methods by which an owner of a motor vehicle is allowed to meet the requirements of the LMVSRL. Pursuant to La.R.S. 32:1042, any person who is the registered owner of more than twenty-five motor vehicles or who owns an equity interest in Louisiana property having a value of one hundred thousand dollars or more, may qualify as a self-insurer by obtaining a certificate of self-insurance. Although self-insured vehicles are uninsured, the certificate of self-insurance indicates the self-insured is fiscally responsible and will pay damage claims and judgments involving its liability exposure. While Louisiana courts have consistently recognized that a certificate of self-insurance indicates the self-insurer possesses sufficient assets to satisfy judgments if found legally liable, the courts have refused to consider a certificate of self-insurance an insurance policy. Jones v. Henry, 542 So.2d 507, 509 (La. 1989) (self-insurers do not have to provide uninsured motorist coverage); Jordan v. Honea, 407 So.2d 503, 504 (La.App. 1st Cir.1981), writ denied, 409 So.2d 654 (La. 1982) (uninsured motorist coverage is required only if there is an insurance policy). Instead, the courts have treated each of the four methods listed above as a distinct means of establishing proof of financial responsibility. B. Statutorily Required Omnibus Coverage Under a provision commonly referred to as an omnibus clause, insurance coverage may be extended to other persons who are using the insured vehicle with the insured's express or implied permission. [9] An omnibus clause is intended to extend liability beyond the law of principal and agent. [10] The Louisiana legislature requires a Motor Vehicle Liability Policy, as defined, to include an omnibus clause which insure[s] the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured..., subject to certain statutory limits. La.R.S. 32:900(B)(2). [11] Similarly, the provisions of La.R.S. 32:861(B) order a person who posts a motor vehicle liability bond to satisfy [a]ll judgments rendered against him or against any person responsible for the operation of the obligor's motor vehicle with his express or implied consent... for damages arising out of the ownership, maintenance, or use of such vehicle. Comparably, the payment of judgments which are secured by a deposit as provided by La.R.S. 32:861(C) may be brought against the registrant or the person responsible for the operation of the registrant's motor vehicle with his express or implied consent .... Thus, the legislature has treated each of the four methods of establishing proof of financial responsibility as distinct and separate by expressly stating the requirements for each method individually. C. Extent of the Self-insurer's Liability We find no provision in the LMVSRL which expressly requires a self-insured to be responsible for the actions of a person using the vehicle with the express or implied consent of the self-insured or the authorized driver(s). Had the legislature intended for self-insurers to provide omnibus coverage, it could easily have included a mandatory omnibus provision in La.R.S. 32:1042 which details the requirements and obligations of self-insurers. The failure of the legislature to prescribe omnibus liability for self-insurers, while specifically requiring policy holders and those who post security as proof of financial responsibility to provide omnibus coverage, evidences there is no legislative intent to require self-insurers to provide such coverage. [12] Unless and until the legislature of this state specifically mandates that self-insurers provide omnibus liability on their vehicles, we will not require a self-insured to provide such coverage. To do so would be a usurpation of the legislative function and violative of the separation of powers doctrine. Consequently, we hold the LMVSRL does not compel Budget to provide omnibus coverage on its vehicles.