B-158712-OM December 13, 1974

B-158712-OM: Dec 13, 1974

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It is clear that GAO staff members authorized to rent cars in the course of their official duties are fully covered both as to collision damage and potential liability for their negligence in operating rented automobiles. Government travel regulations have prohibited payment or reimbursement of the cost of collision damage waiver insurance. Although the issue is not explicitly discussed in our administrative travel regulations. The Order does indicate that travel expense reimbursement for GAO employees is subject to the travel regulations generally applicable to most civilian employees of the Government. Is the current provision which precludes payment or reimbursement of the cost of optional collision damage waiver insurance.

B-158712-OM December 13, 1974

(No Digest)

General Counsel - Paul G. Dembling

Insurance Coverage for Vehicles Rented by Government Officers and Employees.

Your memo of December 5, 1974, with attachments, requested our views as to insurance coverages for our staff in connection with car rentals on official business.

It is clear that GAO staff members authorized to rent cars in the course of their official duties are fully covered both as to collision damage and potential liability for their negligence in operating rented automobiles. Employees therefore need not and should not purchase the additional collision insurance. Furthermore, since October 10, 1971, Government travel regulations have prohibited payment or reimbursement of the cost of collision damage waiver insurance. This revision to the regulations resulted in large part from a study the GAO did in 1969 (see B-158712, June 30, 1970, copy attached), which showed that Government costs for paying the collision damage waiver fees far exceeded the damage claims not covered by insurance.

Although the issue is not explicitly discussed in our administrative travel regulations, Comptroller General's Order 1.17, the Order does indicate that travel expense reimbursement for GAO employees is subject to the travel regulations generally applicable to most civilian employees of the Government. Section 3.2.c. of the Federal Travel Regulations, FTMR 101-7, is the current provision which precludes payment or reimbursement of the cost of optional collision damage waiver insurance.

The basis for the employees' coverages differs slightly with respect to collision and liability. As to collision, the car rental company, under the standard rental agreement, provides coverage for all direct and accidental loss or damage to the vehicle from fire, theft, or other causes generally included in the comprehensive auto insurance coverages. The car rental company's insurance policy further protects the employee for direct and accidental loss or damage from collision or upset in excess of $100, provided the employee complies with all other terms and conditions of the standard rental agreement. Collision damage of $100 or less is an obligation of the individual who rents the car. However, in the case of our staff, and Government employees generally, the Federal Travel Regulations, cited above, permit agencies to pay for collision damage up to the deductible amount, as specified in the car rental contract (usually $100). GAO policy has been to pay such claims, and we have done so in the last two instances. Our prior decisions have allowed other agencies to make these payments without regard to the employee's fault in causing the damage, so long as it occurs while the rented vehicle is being used on official business.

Potential liability for property damage or personal injuries caused to third parties as a result of the employee's negligent operation of the rented vehicle is also covered under insurance carried by the car rental company. This protection is stated in the rental agreement. I note that the Avis rental agreement in the file attached to your memo specifies personal injury or death limits of $100,000 for each person, and $300,000 for each accident; the property damage limit is $25,000. These are obviously maximum limits and, unlike the $100 exclusion for collision, there is no minimum on the liability coverages.