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Car renters stuck with storm damage
By Gary Stoller, USA TODAY
Car-rental giant Hertz has changed its contracts to make customers responsible for damage from acts of nature.
It told its best customers last month that they'll be responsible for auto damage from natural causes such as windstorms, hurricanes and tornadoes. In the past, it was the rental firm's responsibility.
Avis and
Budget are moving in the same direction.
Hertz informed its #1 Club Gold members of the policy after quietly implementing it last year for the rest of its customers. Hertz says it's not the first company to make the change, which it says was underway before Hurricane Katrina.
But company spokesman Richard Broome says the catastrophic storm shows why customers should be liable. Renters were aware of the approaching hurricane that devastated the Gulf Coast last summer and returned vehicles before it struck, or drove them to safety. Katrina claimed only several hundred Hertz cars, a "remarkably small" loss under the circumstances, he says.
The general principle has always been that the renter is responsible for vehicle damage, Broome says. Since renters are already liable for unavoidable road accidents, it follows that they also should be liable for acts of nature, which often are foreseeable, he says.
California and Wisconsin have laws prohibiting rental companies from placing liability on consumers for acts of nature, Broome says. New York and Indiana have laws prohibiting the placing of liability on consumers for flood damage, he says.
Cendant Car Rental Group, owner of Avis and Budget, plans a similar change in policy for all Avis renters and Budget Fastbreak members, spokeswoman Susan McGowan says. Budget's other customers already are responsible for damages from natural acts.
National,
Alamo, Thrifty, Dollar and
Enterprise also hold renters responsible. "It's outrageous," says consumer advocate Clarence Ditlow of the Center for Auto Safety, a group founded by Ralph Nader. "Just because it's an industrywide practice, it doesn't make it fair."
Daniel Emmanuel, a member of Hertz #1 Club Gold and Avis Preferred, is unhappy with putting the onus on renters. "I think this policy comes from the rash of hurricanes in the last couple of years, but it penalizes a lot of folks who are not in these areas," says the automotive consultant from Shenandoah, Texas.
Most renters have personal auto insurance coverage that will pay for damage to a rental vehicle, Broome says. In some cases, credit cards used for the rental provide coverage. Renters can also buy from Hertz a damage waiver that would shift responsibility to the rental company. Damage from natural causes would be covered in a personal auto insurance policy if it includes comprehensive coverage, says Michael LaPlaca, a Maryland lawyer who writes rental agreements for rental-car companies.