R.I. Measure Seeks Car Rental Coverage Details

The Rhode Island House of Representatives has passed legislation sponsored by House Majority Whip Rene R. Menard to require vehicle rental companies to clearly lay out the restrictions on the collision insurance they promote to customers.

Automobile rental companies routinely encourage their customers to purchase a collision damage waiver, a collision insurance police for their rental car. State law already requires rental companies to put specific text into the collision waiver contract disclosing its restrictions and telling customers that they may already have collision coverage for rental cars through their regular auto insurance plan or their credit card companies.

Menard’s bill (2004 – H7600), which passed the House is now in the Senate, would require rental companies to include two more items in the list of restrictions on the waiver contract.

The first would tell customers that, if their rental agreement limits the states in which the rental car may be driven, the collision waiver would not cover damage to the vehicle that occurs outside those states.

The second item would tell customers that the collision waiver would not cover damage or theft of the rental car if the renter fails to return the original ignition key to the rental company, fails to report a theft of the car to police within 72 hours of discovering it, or if the renter refuses to cooperate with authorities and the rental company in the investigation.

Menard, a Democrat whose District 45 is in Lincoln and Cumberland, said the legislation is an effort to protect consumers and rental car companies alike.

“Giving consumers more disclosure about a product is beneficial for everyone involved. It helps consumers by making them more aware of the limitations on the insurance coverage before they buy it, and it helps rental companies by making it clear that renters must follow the rules of their rental contract and cooperate with the authorities if there are any problems,” said Menard. “It basically helps promote a good business relationship between the rental company and the renter.”