New York Approves Anti-Steering Law Against Auto Insurers

A new law in New York bars auto insurers from requiring consumers to use designated vehicle rental companies when obtaining their insurance rentals.

Insurance companies must also inform consumers of their right to choose a vehicle rental company, according to the new law.

The law was signed by New York Gov. David Paterson on Aug. 13.

To view the law, click here.


  1. Mike [ August 18, 2010 @ 04:58PM ]

    This is long overdue. It makes no sense why all insurance companies push Enterprise. Why not have choice and alternatives like health insurance companies

  2. Michael [ August 19, 2010 @ 06:46AM ]

    They push Enterprise because Enterprise pays them to do so.

  3. Brady [ August 19, 2010 @ 07:04AM ]

    Mike, I'll tell you why insurers push Enterprise. Enterprise is embedded with major auto insurers to the point many claims offices have an Enterprise desk in their facility. Enterpise not only offers a disounted rate for the rental coverage, a good thing, but they also offer an incentive bonus to the insurer for usage, a bad thing.

    I own an insurance agency and also operate a rental car office with the "other 900 pound gorilla" and it gets very frustrating that my insured clients wind up in Enterprise cars. While we tell our insured clients that we can set them up in a rental, and we do get a good percentage because we have the same replacement rates and electronic billing, etc., our clients tell us they felt they were pushed to Enterprise by the claims adjusters.

    Unfortunately, the New York law will not accomplish anything. All a claims rep will have to do is ask if they would like him to line up a rental for them, they will say "yes" in most cases, and it will still be Enterprise. That's how it gets done in auto glass as well. The insurer does not require the claimant uses a large national glass chain, but when asked if they would like to be connected to the glass service, it is very easy to just say "yes" and that leaves out other glass suppliers, who in many cases do a superior job compared to the national glass provider.

    Finally, from the insurance agent perspective, if your rental firm is not one of the "big two" then you don't have much hope of penetrating the replacement market. Law or no law. Those two companies have established the pricing and the ease of handling the replacement rentals to the point that if you can't duplicate their methods and ease of doing business, why should I, as the insurance agent, want to deal with anyone else?

  4. Yankee [ August 19, 2010 @ 11:03AM ]

    To the last poster, the language below should prevent this from happening.


  5. Darcy [ August 19, 2010 @ 11:48AM ]

    Well that seems to be the problem Brady. Companies like Enterprise and Discount have monopolized the insurance replacement business to the point where other car rental companies can't compete, and that's simply not fair. What's worse, if these other companies are lucky enough to get some insurance business, adjusters will usually demand that they match Enterprise's rates, even though they're only getting a fraction of the business that Enterprise gets. And I would dispute the "ease of handling" you mentioned with regards to how Enterprise et al does business. I've heard horror stories of how customers are pretty much forced to take their rentals without being given a choice, or where adjusters threatened to pull customers out of a competing rental company's vehicle "just because" they didn't use Enterprise or Discount. Very unethical, if not illegal.

  6. brady [ August 19, 2010 @ 01:05PM ]

    Sure, Yankee, the conversation will go like this: You are entitled to use any car rental firm you want, but if you'd like, I can arrange that for you. Nine out of ten times the guy will say "Fine, thank you for taking care of that." That's why, as mentioned above, even though I own an insurance agency, and our clients know full well we have a car rental agency, and it's one of the big boys brand's, I bet at least half of my insurance clients that obtain replacement vehicles wind up in Enterprise cars.. It's just too easy. There are so many issues on one's mind after being in an accident, that if they can bang out one thing easily, they will do it. Otherwise, I'd have 100% of the rentals that my insurance clients drive.

    Again, no matter the law, if you are ont one of the "big two" you have an uphill battle on your hands.

  7. Jason T [ August 20, 2010 @ 07:41AM ]

    You people are all missing the point. Its not that Enterprise has such a firm grip as much as it is other companies not wanting the business.

    They dont want to compete. Insurance replacement rates are garbage. Its not worth it unless you can cut tons of corners and skirt labor laws like the green machine does.

  8. brady [ August 20, 2010 @ 08:58AM ]

    Jason-Not so. Yes, the per day rates for insurance reimbursement can be, but are not always, low. But when it takes three weeks or more to get some cars back on the road, we'll take that 21 day rental.

    You also need to learn to work that claims adjsuter. If the rental is for the claimant, then that claimant is entitled to a replacement vehicle comparable to his damaged vehicle. Most adjusters, not being student of the insurance policies, will indeed go for the least expensive route. But if you know the auto policy language, whether it's the personal or business auto policies, you will know the definition of "property damage" is "physical injury to, destruction of or loss of use of tangible property." It does not say the loss of use should be an econo car. If the damage to the tangible property was damage to a full size car, then the loss of use payable is for a full size car. Try that out on your adjuster next time. Ask him to show you where in the auto policy it says to minimize the size class of the rental vehicle.

    We just did a three week Chevy Tahoe at $75 a day on an insurance claim. Not a bad rental at all.

  9. Jason T [ August 20, 2010 @ 09:52AM ]

    Sorry Brady it is so. Most replacement rates are grossly below retail rates. It does not take 3 weeks to get a car back on the road - if that happens to a rental company they are overfleeted and incompetent.

    $75 on a Tahoe is not a good rental at all. Companies can rent compacts for that much.

    This law will do little for competition because no one wants the business that Enterprise has. Hertz is trying it, but they are figuring out how bad it is and slowing down on their aggression to get into it.

  10. John [ August 20, 2010 @ 11:46AM ]

    A. Slowing down? Have you not noticed a network of over 1500 local offices in the US now?
    B. Rate is not the only factor in deciding the return on a rental. Labor to continue to flip your one day retail rentals, lower utilization percentage, labor to process the paperwork on these, etc. The AVERAGE insurance replacement rental goes out for between 12-14 days, in addition you are usually able to determine that your lender actually carries insurance unlike in retail where proof is not required.

  11. David [ August 20, 2010 @ 02:02PM ]

    As a New York car rental operator, we want the business and are active in the insurance replacement market. We typically offer lower rates than Enterprise and do not push LDW, SLI and PAI to insurance renters as they don't need that coverage. Yet the insurance companies usually call when their insured has a debit card, or is somehow otherwise rejected by Enterprise. Enterprise controls the ARMS system used by the insurance companies which seems to be a possible anti-trust issue. It may be time for ARN or some other publication to examine the billion dollar insurance replacement industry. Just as American Airlines was forced to part with its SABRE system, ARMS should likely be separated from Enterprise.

  12. Yankee [ August 22, 2010 @ 02:09PM ]

    You all are missing the point, the day the the major news organizations have the balls to go after Enterprise and make public the large scale payoffs they give insurance companies, the sooner this steering will stop. It's hard to imagine this scam, including "missed damage" scam and the skirting of the labor laws has stayed quiet this long. If 60 minutes were to dig into the steering problem they would uncover significant high level payoffs to insurance companies.

    Some day...

  13. Frank [ August 23, 2010 @ 09:01AM ]

    While the insurance companies may continue to skirt the law, it is high time that someone, be it ARN or some government body examined this overlooked segment of the industry. It is a multi billion dollar segment of the car rental industry so dominated by Enterprise. It makes no sense. We are an independent company willing and ready to serve this market here in New York yet we are told that insurance companies only use Enterprise. Must be something fishy behind the scenes. Too bad ARN is not independent enough to take on this issue.

  14. Gil [ August 23, 2010 @ 09:07AM ]

    DARCY - Do you have any documentation or some sort of evidence that these payments take place?

    I have heard that before - it would be great if someone had a copy of these agreements

    Maybe we can speak one day offline

  15. Mark [ August 24, 2010 @ 06:00AM ]

    If someone has proof of the payments between Enterprise and the Insurance Companies that would be great to show the media and the Government; maybe they will finally look into the tieing agreements between them which is grossly unfair. Afterall, the insurance replacement indusry is a billion dollar industry which deserves some scrutiny

  16. Frustrated Car Rental [ August 25, 2010 @ 07:35AM ]

    I am glad to see that NY finally did something on this issue. How is it that one company, Enterprise, can so dominate an industry. I have had customers at my counter be told by Allstate and Geico, that they should leave my office and go to Enterprise.It makes no sense when I am able to offer a lower rate yet I lose customers. Where is the freedom of choice, where is the fairness. I agree with Yankee, too bad no one looks into the deals between Enterprise and the insurance companies. It makes no sense there is no freedom or choice. I just hope NY State backs up the law with action and enforcement.

  17. Cheryl [ August 25, 2010 @ 08:26AM ]

    Way to go NY!!!! This juggernaut of Enterprise and Insurance Companies needs to STOP!!!!!

    It is insane that Enterprise owns this market. I own a body shop and car rental company and I need to fight for my customers to rent from me, even when I am cheaper than Enterprise - Can someone explain that?

    I think Brady and Yankee hit it on the head - PAYOFFS

  18. Darcy [ August 25, 2010 @ 03:56PM ]

    That's right Cheryl. It's all about payoffs. Insurance companies, and even body shops earn hefty commissions from the car rental giants just for sending them business, so it's in their best interest to keep doing so. If I was told I could receive a kickback percentage off of every rental that I send, then why on earth would I want to use anyone else? Enterprise is the Microsoft of the car rental industry: They'll reach into their very deep pockets to hoarde all of the business for themselves while pushing the little guys out. Secondly there's the fear factor: when a customer's just been in an accident, they're clearly shaken up and can't think clearly. There have been many times where I have rented to people who were just in an accident only to have them return the car the very next day because the insurance company told them that their rental WOULDN'T BE COVERED (a flat out lie) and that they would have to pay out of their own pocket, only to discover later that same day they were put into an Enterprise car. So yes, Enterprise et al have the insurance companies on a very tight leash.

  19. Yankee [ September 8, 2010 @ 01:13PM ]

    Let's not let this die, there are too many of us that are negatively impacted from this. What can we do? What can ARN do? Who can we contact?

    How do we blow the top off of this?

  20. Yankee [ September 9, 2010 @ 07:13PM ]

    There's no way this magazine or news organization will take on a company this large.

    Just look at and you'll get a glimpse at some of things they do.

    You name me one claims manager that does play gold whenever they want, tell me about one adjuster that won't lose their job if they don't steer customers to ERAC? Flying insurance executives to see their computer system home base on the corporate jet. How many claims managers have free cars from them, how many preferred body shops drive free cars from ERAC, how many times they "create" damage and scam customers, how many free lunches, happy hours or free trips to insurance companies get to have before ERAC crosses fair trade laws?

    What needs to be done to attempt to level the playing field?

  21. absolute autoglass [ May 14, 2015 @ 12:11PM ]

    I just wish they would enforce these laws. Safelite solutions are steering pros in the auto glass industry. And again illegal. Corporate America needs to be put on a diet

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