PCI Urges R.I. Gov. to Halt Rental Car Amendment

A trade association representing most of Rhode Island’s largest auto insurers is urging Gov. Donald Carcieri to veto a recently passed bill because of an amendment that would impact rentals of replacement vehicles for insured drivers involved in accidents.

The General Assembly approved an amendment to S-2616, the Unfair Claims Settlement Act, which would potentially restrict insurance companies from offering the customer the ability to rent a replacement vehicle from a preferred provider.

“Our member companies do not compel customers or claimants to rent from a preferred rental company while their vehicle is being repaired,” said Frank O’Brien, vice president and New England regional manager for the Property Casualty Insurers Association of America (PCI).

“What they have been able to do is recommend a preferred company which is under contract with the insurer to provide rentals at a lower cost per day. This may allow the customer to keep the vehicle for a longer period of time, which is especially important if there is a delay in repairing the damaged vehicle. If a customer doesn’t know about the preferred rental company and the lower rates, they are likely to rent from a company charging a higher rate and, as a result, they may end up paying additional out-of-pocket expenses for any additional balance that exceeds the limit in their insurance policy.

“The amendment would likely impact the overall amount of coverage available to the customer and has the potential to drive up the cost of auto insurance premiums in Rhode Island. We are asking the governor to closely scrutinize this amendment and use his veto powers to put the brakes on it.”

PCI member companies write 70 percent of the private passenger auto insurance in Rhode Island.