Section 32E1/2. (A) As used in this section and section 32E3/4 the following words and phrases shall have the following meanings unless the context requires otherwise:

''Authorized Driver'', a renter who drives a private passenger automobile rented under the terms of a rental agreement or any person expressly listed by the rental company on the rental agreement as an authorized driver.

''Collision Damage Waiver'', any contract or contractual provision whether separate from or a part of a rental agreement, whereby the rental company agrees, for a charge, to waive any or all claims against the renter for damages to or loss of the rented private passenger automobile during the term of the rental agreement.

''Private Passenger Automobile'', a motor vehicle of the private passenger or station wagon type, including a passenger van or mini van, which is designed primarily for the transport of persons.

''Rental Agreement'', any written agreement setting forth the terms and conditions governing the use of a private passenger automobile provided by a rental company for thirty continuous days or less.

''Rental Company'', any person or organization in the business of providing private passenger automobiles for rent to the public from locations in the state.

''Vehicle license cost recovery fee'', a charge to recover costs incurred by a rental company to license, title, register, plate, inspect or pay excise tax on its rental fleet in the commonwealth which shall be separately stated and assessed on a rental agreement in a private passenger motor vehicle rental transaction originated in the commonwealth.

(B) (1) Except as provided in paragraph (2), each collision damage waiver shall display the following notice in no smaller print than ten point type:

''NOTICE: This contract offers, for an additional charge, a Collision Damage Waiver to cover your financial responsibility for damage to the rental vehicle. Your personal automobile insurance may already cover you for damage to a rental car. The purchase of a Collision Damage Waiver is optional and may be declined. For Massachusetts drivers: If you have an automobile policy on your personal vehicle with coverage for collision, your policy will cover collision damage to a rental vehicle, less the deductible on your policy. Drivers who hold policies in other states should check with their insurance agents to determine whether their policies extend to rental vehicles.''

(2) If the commonwealth adopts a law, regulation or legally binding policy that requires private passenger automobile insurance policies approved for sale in the commonwealth to extend comprehensive coverage to rental vehicles, then each collision damage waiver must display the following notice in no smaller print than ten point type:

''NOTICE: This contract offers, for an additional charge, a Collision Damage Waiver to cover your financial responsibility for damage to the rental vehicle. Your personal automobile insurance may already cover you for damage to a rental car. The purchase of a Collision Damage Waiver is optional and may be declined. For Massachusetts residents: If you have an automobile policy on your personal vehicle with coverage for collision, your policy will cover collision damage to the rental vehicle, less the deductible on your policy. If you have comprehensive coverage on your vehicle, your policy will cover loss on the rental vehicle caused by fire, theft or vandalism, less the deductible on your policy. Drivers who hold policies in other states should check with their insurance agents to determine whether their policies extend to rental vehicles.''

(C) (1) A rental company, in a rental agreement for a term of thirty days or less, may not sell a collision damage waiver unless the renter agrees to such collision damage waiver in writing by initialing the appropriate portion of the rental agreement at the time the rental agreement is executed or by pre-selection of collision damage waiver in master, corporate or group rental agreements. A collision damage waiver shall not be considered insurance under this section or under any other General Laws.

(2) No rental company may sell or offer to sell a collision damage waiver unless the rental agreement which applies to the particular transaction includes on the signature page of the individual rental agreement or within the master, corporate or group rental agreement when collision damage waiver is pre-selected the notice required in paragraph (1) of subsection (B).

(3) No rental company which advertises to rent or rents a private passenger automobile for a rate which does not include collision damage waiver may require that collision damage waiver be purchased as a condition of the rental.

(4) If a renter declines to purchase collision damage waiver, no rental company may require that the renter provide a deposit whether in cash or by credit card to cover possible damage or loss to the private passenger automobile.

(5) If a collision damage waiver is purchased, only the following may be excluded from the protection of the collision damage waiver:

(a) damage or loss caused intentionally, willfully or wantonly by an authorized driver;

(b) damage or loss occurring while an authorized driver operates the rental vehicle while legally intoxicated or under the influence of any illegal drug or chemical as defined or determined under the law of the state in which the damage occurred;

(c) damage or loss caused while an authorized driver is engaging in any speed contest;

(d) damage or loss caused while an authorized driver is using the vehicle to push or tow anything or using the vehicle to carry persons or property for hire, unless expressly authorized in the rental agreement;

(e) damage or loss incurred while an authorized driver is driving outside the United States or Canada, unless expressly authorized in the rental agreement;

(f) damage or loss incurred while the vehicle is driven, with the renter's permission or accession, by anyone other than an authorized driver;

(g) damage or loss incurred after the private passenger automobile was rented or an authorized driver was approved as a result of fraudulent information provided to the rental company;

(h) damage or loss incurred as a result of commission of a felony by an authorized driver.

(D) Notwithstanding any general or special law to the contrary, the rental company and its employees may offer or sell insurance only in connection with and incidental to the rental of private passenger automobiles or any other rental vehicle with a gross vehicle weight of less than 26,000 pounds and that does not require the operator to possess a commercial driver's license, whether at the time the rental agreement is executed or by pre-selection of coverage in master, corporate or group rental agreements, without the imposition of licensing, appointment, testing and education requirements if:

(1) the rental period does not exceed 90 consecutive days;

(2) at every rental office where rental agreements are executed, brochures or other written materials are readily available to the prospective renter that: (i) summarize clearly and correctly the material terms of coverage offered to renters, including the identity of the insurer; (ii) disclose that the coverage offered by the rental company may provide a duplication of coverage already provided by a renter's personal automobile insurance policy, homeowner's insurance policy, personal liability insurance policy, or other source of coverage; (iii) state that the purchase by the renter of the kinds of coverage specified in this section is not required in order to rent a vehicle; (iv) and describe the process for filing a claim in the event the renter elects to purchase coverage and in the event of a claim; and

(3) the renter agrees to purchase the coverage by initialing the appropriate portion of the rental agreement at the time the rental agreement is executed or by pre-selection of coverage in master, corporate or group rental, and a description of the coverage is provided to every renter who elects to purchase the coverage.

(E) Any person violating this section shall be punished by a fine of not more than $100 for each violation. Each rental transaction in violation of this section shall constitute a separate violation. A civil penalty may be assessed in an action brought on behalf of the commonwealth.

(F) The director of consumer affairs and business regulation shall inform the office of the attorney general of any method, act or practice that the director determines to be a violation of this section.