Section 3440. Insurance covering private passenger motor vehicles; rental vehicle coverage

(a) For the  purposes  of  this  section,  a  "private  passenger  motor  vehicle"  is  a  motor  vehicle:  (1)  of  the private
  passenger or station wagon type that is owned or hired by an  individual
  or by husband and wife under a long-term contract and is neither used as
  a  public  or  livery  conveyance  for  passengers  nor rented to others
  without a driver; or
    (2) with a pick-up body, a delivery sedan, panel truck or  van,  owned
  by  an  individual  or by husband and wife who are residents of the same
  household  or  by  a  family  farm  co-partnership  or  a  family   farm
  corporation,  and  not customarily used in the occupation, profession or
  business of the insured other than farming or ranching, whether  or  not
  used in the course of driving to or from work.
    (b)  Subject  to  subsection  (d) of this section, every motor vehicle
  liability  insurance  policy  which  insures  less  than  five   private
  passenger  motor vehicles registered in this state shall by endorsement,
  provide coverage for the obligation of the insured for actual damage to,
  or loss of, vehicles (including loss of use) rented by an insured in the
  United States, its territories or possessions and Canada under a  rental
  agreement  with  a term of thirty continuous days or less, regardless of
  where within those areas such rental vehicle is registered,  rented,  or
  operated,   subject   to   such  maximum  coverage  limitations  as  the
  superintendent may by  regulation  prescribe  or  any  other  applicable
  limits  in  the  policy,  whichever is higher. The term "rental vehicle"
  shall be used as defined in section one hundred  thirty-seven-a  of  the
  vehicle  and  traffic  law, if a private passenger motor vehicle and not
  used for the transportation of persons or property for hire.
    (c) In no event shall payment be made by  more  than  one  insurer  or
  under  more  than  one  policy, and where a person is insured under more
  than one policy, such coverage shall apply in  the  following  order  of
  priority: (1) the policy or policies with respect to which the person is
  a named insured; (2) if the person is not a named insured on any policy,
  the policy with respect to which the person is an insured; (3) where two
  or  more  policies  provide  coverage  of equal priority, the insurer to
  which the claim is first submitted.
    (d) (1) Every policy to which this section applies shall, either  upon
  issuance  or  upon the first renewal after April first, nineteen hundred
  eighty-nine, be accompanied or supplemented  by  a  notice,  in  a  form
  prescribed  or  approved  by the superintendent, advising the insured of
  the rental vehicle coverage provided pursuant to this section.
    (2) In the event that a separate  charge  based  upon  rental  vehicle
  coverage  experience  is  included  in  the  rate or policy premium, the
  insurer shall thereafter advise each new insured and  with  the  initial
  renewal   notice  for  policies  thereafter  renewed  of  the  insured's
  opportunity to reject such  coverage  within  ten  days  following  such
  notice.
    (e)  Nothing  in this section shall be construed to require an insurer
  to make payment under the coverage herein for damage to, or loss  of,  a
  rental  vehicle (including loss of use) which the rental vehicle company
  is precluded from recovering from the insured whether  pursuant  to  the
  terms  of  the  rental  agreement  or due to the prohibitions of section
  three hundred ninety-six-z  of  the  general  business  law  or  similar
  statutory  provisions  of other jurisdictions; or which is not otherwise
  recoverable under the applicable insurance policy or policies.
    (f) Nothing in this section shall preclude an  insurer  from  pursuing
  subrogation  rights  in  connection with claims involving rental vehicle
  coverage.