I'm no expert on Connecticut law, so I can't speak to the specific issue of whether Connecticut law prevents the FBO's insurer from collecting more than the deductible from the renter if the airplane is damaged and the insurance pays off. Generally speaking, "no fault" insurance law means that when there is an auto accident, and both drivers have their own insurance, the question of who's at fault is not an issue. Each driver claims against his own insurance company and each company pays its policyholder. This prevents the crossfiling of claims by each driver against the other's insurer, and cuts the expense of litigation to determine which insurer will pay both drivers. The idea is that given the large pool of policyholders and accidents, the payoffs will even out in the long run for the insurer, and there's no drawn-out haggling over whose fault it is before the claims are paid to the policyholders. But I don't see how such a law would affect the case of an uninsured pilot wrecking someone else's airplane. Therefore, I wouldn't bet my assets on it without checking with a Connecticut-licensed attorney.
Further, whether or not the insurer can subrogate against the pilot for any claims paid off to the FBO for the damage to the plane, any third party in the accident (either a passenger or someone out side the plane) can still sue the pilot directly for injuries or property damage, and that "no-fault" law won't protect the renter who is not a named insured on the FBO's policy. In addition, the FBO may sue the renter for uninsured losses, such as economic loss for the time the airplane is unavailable because it's being repaired. Thus, even a "waiver of subrogation" clause in the FBO's policy may not protect the renter against suit by the FBO for uninsured losses.
Remember that in most cases, only the FBO is a "named insured" on the FBO's aircraft insurance policy (although a few FBO's pay extra to make the renters named insureds, too -- you pay for that with a higher rental rate, but it's worth it). While the renter may be an approved pilot under the Open Pilot Waiver clause, or even listed by name as a "named pilot," that only means that the insurance protecting the FBO is in force while the renter is flying the plane. It does not mean the insurance will protect the renter. If there's an accident, and a third party sues for damages, the insurance company will defend only the FBO and pay off claims only against the FBO -- in fact, the insurance company will probably do its best to paint the renter pilot as the party at fault in order to protect its policyholder FBO. Lacking a renter's insurance policy, the renter is usually on his own for legal defense and to pay off any damages awarded against him.
For these reasons, renter's insurance (actually, "non-owned aircraft" insurance, since it covers borrowing as well as renting) is essential protection for anyone renting or even borrowing other people's airplanes unless that pilot is judgement-proof (i.e., no assets worth taking or any expectation of assets in the future, or so rich that lawyers are on retainer and even a 7-digit award can be paid out of pocket).
