The Car and Truck Fleet and Leasing Management Magazine

North Carolina Ends Audit of TRALA Member

October 1, 2002

The North Carolina Department of Insurance Licensing closed an audit of a member company of the Truck Renting & Leasing Association (TRALA) after the state Attorney General’s office issued an advisory letter stating that extension of insurance on commercial rental truck agreements was not considered a sale of insurance. Earlier this year, the North Carolina Department of Insurance Licensing contacted a TRALA member regarding sales agents extending vehicle insurance to commercial rental customers, questioning if extension of insurance qualified as an actual sale of insurance.Since lessors must already have insurance to register vehicles, the state determined the customer “is really purchasing proof that mandatory coverage...is in effect” and “the customer fee is a reimbursement for coverage already obtained...and is not the purchase of new insurance through an intermediary agent of the insurance company.”The state requested truck lessors take the following precautions to ensure they do not violate the limited license requirements: Do not allow employees to advise customers on the need for insurance when a personal liability policy may cover the rental vehicle, and refrain from using the term “insurance provider” on forms and documents.
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