Montes-Harris

Pursuant to rule 29.8 of the California Rules of Court, we granted the request of the United States Court of Appeals for the Ninth Circuit for a decision addressing the following question: Does the duty of an insurer to investigate the insurability of an insured, as recognized by the California Supreme Court in Barrera v. State Farm Mut. Automobile Ins. Co. (1969) 71 Cal.2d 659 [ 79 Cal.Rptr. 106 , 456 P.2d 674 ] (Barrera), apply to an automobile liability insurer that issues an excess liability insurance policy in the context of a rental car transaction?

Subject to our reservation of the specific question whether the Barrera duty to investigate insurability applies, as a general matter, to automobile insurers issuing excess liability insurance, we conclude that where, as here, the sale of excess liability insurance in a rental car transaction occurs after the rental car customer presents a facially valid driver’s license and after the license inspection and signature verification requirements of Vehicle Code section 14608, subdivision (b), have been met, the excess insurer has no obligation to conduct a further inquiry regarding the validity of the customer’s driver’s…