SYRACUSE, N.Y. -- With more rental fleet insurance providers pulling out of the New York market, and others offering cost-prohibitive quotes, hundreds of car rental independents and franchisees in the state are at risk of closing their doors in the coming weeks.
All rental company state registrations come due at the end of September, and operators must show proof of fleet insurance. But for an alarming number of small to medium-size operators in the state of New York, the search for coverage has produced nothing but frustration. Even for operators with stellar loss runs.
Insurance providers point to the state's unlimited vicarious liability as the primary culprit. The exposure in the state is simply too great.
"We're at the end of our rope in terms of options, and this isn't going to just affect the rental companies," said Patrick Tucci Jr., president of the New York Vehicle Rental Association (NYVRA) and rental manager at the Americar/Payless location in Syracuse. "This will affect the families of rental company employees and the rates that consumers will pay for rentals in New York state in the future."
An estimated 300 to 350 rental companies are now at risk of closing or have already closed because of the current insurance crisis, Tucci said. Most renewal quotes have sought premium hikes in the 200% range.
These operators don't have the option of passing such a premium hike onto customers because their rental rates would no longer be competitive with the major national rental companies, which are self-insured, Tucci said.
Auto Rental News will explore the current insurance crisis in New York in the upcoming Nov./Dec. issue.