NY Bill Would Overturn Law Protecting Car Renters

June 13, 2001

A 1988 New York law making auto rental car companies responsible for the principal costs of damaged cars would be overturned by Assembly Bill 7742, which is being considered by an Assembly committee.

“In view of the insurance fraud problem and rising costs of auto insurance in New York, it is illogical to impose additional costs on policyholders as this bill would do,” said Joseph Termini, National Association of Independent Insurers (NAII) associate counsel. The bill is in the Consumer Affairs and Protection Committee.

AB 7742 would remove the $100 cap on a consumer’s liability for damage to a rented vehicle and the rental company’s ensuing loss of business. The bill also would allow a rental company to offer their customers optional vehicle protection that would include any loss of use of the vehicle plus storage, towing or administrative charges.

“The intent of the 1988 law was to place the responsibility for rental car damage repairs upon the rental companies, where it legally should be, with the companies assuming these costs as part of the routine expense of doing business,” Termini said. “In many other states, consumers are paying exorbitant rates for collision damage waivers, and the $9-$13/day fee schedule established in this bill is no exception.

“The original intent of the 1988 legislation in requiring the principal cost for repairing a rental vehicle to be included within the rental charges was borne directly out of the abuses of the car rental industry. The law was enacted as a pro-consumer measure to protect New Yorkers against well-documented improper practices engaged in by the rental industry. This law continues to work well for the insured resident of New York and should be retained.”

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