2010-04-23 / Top Stories

Consumer Car Rental Bill Passes Assembly

Assemblywoman Audrey I. Pheffer is pleased to announce that legislation she introduced prohibiting insurance companies from mandating the use of a particular rental vehicle company, has passed the Assembly.

“There have been instances of insurers steering customers to use one particular rental vehicle company. Oftentimes, these customers are unaware of their right to use other rental companies, which may not only be less expensive, but also more convenient for the consumer. This legislation ensures that consumers are aware of their rights during a time, usually after an accident, where they are dealing with many difficult issues,” said Pheffer.

The legislation, A.4916, prohibits insurers from requiring an insured to use a particular rental vehicle company; requires insurers processing claims to disclose that the insured has the right to use a particular rental vehicle company; and requires insurers to inform consumers of the rights granted under this section.

The bill does not affect the ability of insurers to enter into preferred partner relationships with rental car companies. Since this bill would lead to increased competition for replacement vehicle business among rental car companies, it would likely result in greater bargaining power for insurers to obtain lower rental rates from preferred partners. The legislation is now awaiting action by the Senate Insurance Committee.

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