There are times that the NJSCU member institution employees may rent vehicles for business travel. The owner/rental agency is responsible for maintaining statutory minimum limits of auto liability insurance for short-term rental vehicles. As the liability limits provided by the owner/rental agency are minimal limits, it is also recommended that employees purchase supplemental liability insurance that may be offered by the rental agency. The renter is responsible for collision damage to the vehicle; hence it is recommended that employees also purchase the collision damage coverage (loss damage waiver) available from the rental agency. Some rental companies may offer additional types of coverage for personal injury protection or personal property theft or similar. Other insurances offered may cover third party liability claims. It is recommended by the NJSCU Risk Manager that the additional insurances be purchased.
When purchasing insurance through a rental agency, you should review all insurance information so that you can be aware of potential exclusions of purchased coverage. For example, a policy obtained through the rental company may exclude travel on unpaved roads. If the driver goes on an unpaved road and something happens, it would be the same as not having any insurance. Also, make sure all alternative drivers of the vehicle are listed and included in any coverage obtained. Employees renting vehicles for college business must be sure to comply with all the terms of the rental agreement that may allow the company to void its responsibility to provide liability coverage. Some rental agreements only allow the individual signing the agreement to operate the vehicle, others require drivers to be age 21 or even age 25.
The individual’s personal auto liability insurance (assuming they have it) may offer the individual coverage for rental vehicles, though their policy may have exclusions for business travel, etc. Some credit cards when used to rent a vehicle may also offer some additional coverage but may not act as primary coverage or have specific exclusions. It is up to each individual to be aware of and understand any personal coverage they may have.
The aforementioned insurances would be primary for any claims arising out of the employee’s use of the rented vehicle on college/university business. Subject to the conditions of the NJ Tort Claims Act, the state auto liability program may potentially provide coverage in excess of the other insurance.
Only employees within the scope of their employment with the colleges/universities are allowed to rent vehicles for college/university business.
Reporting Rental Vehicle Auto Accidents
College/University Employees who are in vehicle accidents involving rental vehicles used for business are to:
1. Report the accident to the local authority having jurisdiction. This may be the municipal police, state police, sheriff, or other law enforcement agency. Obtain a copy of the report number. Once available, obtain a copy of the report.
2. Report the accident to the rental company, as required by any rental agreement.
3. Report the accident to their supervisor.
4. Report the accident to their institution’s public safety or campus police department
5. Follow any local instructions for reporting to their respective college/university.
6. Within 24 hours or 1 business day of the accident, notify the state by completing an online RM1 form submission. The online form and instructions for completing the form can be found at: https://www.nj.gov/treasury/riskmgt/rm1-instructions.shtml