You don’t need a car rental company to rent out a car for a day in Virginia.
And you can’t get a refund if you don’t have insurance, a new federal rule prohibits.
In a letter to the governors of several states, the National Insurance Institute (NI) has urged the states to update their state laws to allow insurers to make the same claims for car rental insurance as for a car, and to require insurance companies to pay the same amount of money if they receive a refund.
The letter, issued on Wednesday, says that a vehicle rental company can’t be required to provide coverage if it has a policy of less than $1 million per year.
But a vehicle must have insurance if it’s used for transportation of more than 12 hours per week or if it is being used for “commercial purposes,” which can include transportation of passengers or freight, the letter says.
A similar rule applies for a vehicle owner to claim a refund for an insurance policy with a policy exceeding $5 million.
The National Insurance Council also urges the states that do not allow a refund to allow insurance companies “to make claims for the rental of vehicles in excess of $1,000,000 per year.”
In Virginia, the state insurance department will issue a statement that the state law allows the state to allow a deduction for the cost of a rental vehicle.
The state will also be required by state law to notify the insurance companies of their policy limits.
The Insurance Institute for Highway Safety (IIHS), a non-profit trade association of insurance industry members, said in a statement the rules in Virginia are consistent with the federal law, and the letter “provides additional guidance to all states in their state insurance policies.”
The insurance industry is fighting back against the new rule.
“This is yet another example of the insurance industry trying to impose a false sense of security on customers and create an incentive for car renters to buy and insure a vehicle,” said IHS spokesman Mike Baugh.
“We urge the states in question to follow the letter of the law and allow their insurance companies the same level of coverage as other consumers,” he said.
Robert F. McDonnell said the state will “continue to aggressively enforce existing state law and work with the Insurance Department to protect Virginia’s consumers and taxpayers.”
Virginia insurance regulators said in an email they are still reviewing the letter.
State insurance commissioner Joe B. Taggart told The Associated Press on Wednesday that he hopes the new rules will lead to a “fair and consistent process” for state insurance companies.
Taggart said that he expects the state can get reimbursed for its claims, which could be a significant incentive to insure.
The new rules come after a series of high-profile insurance and car rental car crashes in Virginia that resulted in a number of deaths.
Last week, a woman died when her rental car overturned in Virginia after it lost control.