Establishes that insurers providing rental vehicle reimbursement coverage shall not require an insured to utilize a particular rental vehicle company

Title of bill

An act to amend the insurance law, in relation to rental vehicle reimbursement coverage

Purpose or general idea of bill

The purpose of this bill is to ensure that consumers utilizing rental vehicle reimbursement coverage are able to rent from the rental vehicle company of their choice.

Summary of specific provisions

This bill would:

o prohibit insurers providing rental vehicle reimbursement coverage from requiring an insured to utilize a particular rental vehicle company, rental vehicle company location or a particular concern;

o require insurers to disclose to the insured that the insured has the right to utilize any particular rental vehicle company, rental vehicle company location or a particular concern; and

o require insurers writing automobile insurance that includes rental vehicle reimbursement coverage to inform the consumer of his or her rights granted under this section in a separate written document.

Justification

There have been instances of insurers steering their customers with rental vehicle reimbursement coverage to use one particular rental vehicle company. Oftentimes, these customers are unaware of the availability of other rental vehicle companies, some of which may offer less expensive rentals than the company favored by the insurer. Consumers should not be forced to use one particular rental vehicle company or be in any way limited in their ability to utilize the coverage they purchased. When insurers recommend only one rental vehicle company without telling the consumer they have the option to use any company, consumers (many of whom are distressed from suffering an accident) often hastily agree to rent from the recommended company, regardless of the fact that other, possibly less expensive and more convenient, options are available. This bill would ensure that consumers are afforded the opportunity to make an informed decision.

This bill is based on Insurance Law section 2610, which prohibits insurers providing collision or comprehensive coverage from requiring an insured to utilize a particular repair shop, or, in processing any such claim, recommending or suggesting that the insured utilize a particular repair shop.

Prior legislative history

New Bill

Fiscal implications for state and local governments

None.

Effective date

90 days after enactment.