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Car Rental Rules Shift Liability to Renter

Don't Leave Your Rental Out in the Rain!

By Dan Schlossberg
ConsumerAffairs.com

February 2, 2006
Let the driver beware!

That's the message car rental companies are sending to renters whose vehicles are damaged by bad weather - including not only hurricanes and tornadoes but severe thunderstorms, blizzards, floods, and even hailstorms (a common summer phenomenon in the Midwest). All natural phenomena, from earthquakes to tree limbs and utility poles that make dents when they fall, are included in the edict.

Hertz, the largest rental car company, had imposed the policy on most of its customers last year but has now added its most frequent customers, #1 Club Gold members.

Alamo, Dollar, Enterprise, National, and Thrifty already have the policy in place, with Avis and Budget expected to follow soon.

All have been hit hard not only by the record hurricane season of 2005 but also by rising fuel costs that have cut into their profits. The new rule is a direct result.

The only exemptions are Wisconsin and California, where laws prevent firms from blaming customers for storm-caused damage to rented vehicles. Legal liability also rests with companies rather than customers if floods damage rented cars in two other states, New York and Indiana, but doesn't cover wind, hail, or other natural phenomena.

Although personal auto insurance coverage usually includes rented vehicles, renters can purchase damage waivers that return responsibility - even for natural damage - to companies. Many credit cards also protect consumers in the event something happens to their rental vehicles.

According to the National Association of Insurance Commissioners, comprehensive insurance - which covers more than three-quarters of the nation's 176 million insured vehicles - also covers rented vehicles damaged by natural causes. It's the remaining 23 per cent who need to get coverage at the time of rental, according to car rental executives.

Avoiding a storm in time isn't always easy, however, since hail and tornadoes may materialize from supercell thunderstorms with little or no warning. Even the National Weather Service rarely pinpoints tornado touchdowns and predicted paths less than 20 minutes ahead of time.

Only hurricanes and blizzards, generally slow-moving storms with wide paths, give motorists ample time to escape - if traffic permits and forecasts are believed.

Hurricane Katrina and the Gulf Coast floods that followed claimed several hundred rental cars last fall but Hertz spokesman Richard Broome called the loss "remarkably small" because many renters had the chance to escape. Even so, few could foresee the levee failures that flooded New Orleans after the storm.

Because Mother Nature is an equal-opportunity destroyer, the new car-damage policies are likely to remain a fact of life for consumers who travel.

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