Car Coverage Policy

The issue of the collision damage waiver has taken some new turns.

Several insurance companies offer the collision damage waiver, whereby the car rental company gives up the right to recover the cost of any repairs stemming from collisions, as part of their policies to travelers renting cars, and some car rental firms have expanded the liability travelers face in renting cars.

For example, Travel Guard International has a policy that includes 30 days of collision damage coverage.

Hertz, an industry leader, has joined other car rental firms in enlarging its collision damage waiver coverage to include theft and vandalism, not just collision.

“We’ve noticed a significant rise in theft over the past few years,” a Hertz spokesman said. “It seemed illogical to hold renters responsible for a dent and not for the entire loss of a vehicle.”

In line with this changeover, which went into effect at the beginning of the year, Hertz is now calling its policy “loss damage waiver” since it covers more than just collision.

The cost of the loss damage waiver is the same as before, the Hertz spokesman said.

Policy Changeover

Another example is Thrifty Rent-A-Car, which calls its optional coverage “physical damage waiver,” since its policy covers theft as well as collision.

The price of the physical damager waiver was not affected by this change, a Thrifty spokesman said.

Not every company has changed its collision damage waiver policy, however. “We haven’t made any changes, but we’re reviewing what our competitors are doing,” a Dollar Rent A Car spokesman said.

Since there can be a variation in what you’re responsible for if you have a rental car misadventure, it’s vital to know up front what the terms are with a specific car rental firm.

The cost of these waivers has steadily risen. Collision damage waiver rates cost from $7 to $12 daily, and can be more than 10% of the overall cost of the rental.

The issue of whether such waivers are insurance or not is still being decided in several state courts.

Hertz won a battle in New York when a lower court ruled that Hertz’s collision damage waiver (its name at the time of the decision) was not in the realm of insurance and is therefore not subject to insurance regulations. This decision is under appeal.

Many insurance regulators and other observers believe that collision damage waiver-style coverage, even if not deemed insurance, still belongs under some kind of federal or state regulation to protect renters from unfair pricing.

This issue is also likely to be tackled by the National Assn. of Attorneys General, which is scheduled to examine advertising and insurance practices of car rental firms.

Some renters purchase collision damage waivers, while unaware of coverage they might already have from their own auto insurance firms.

With such coverage, renters would then only be responsible for the deductibles.

Pays for Deductibles

The collision damage waiver coverage offered by insurance companies, intended as supplemental insurance, pays for deductibles.

As with any other insurance, you should check the amount of the coverage, the period covered, who is covered, etc. Find out what the process of coverage actually is.

For example, do you have to settle with the car rental firm and then file a claim with the insurance company?

Another point to keep in mind with a collision damage waiver is that it generally only provides coverage if you have used the car safely. If it’s established that you were driving recklessly or were negligent in using the car (which can involve parking as well as driving), you may still be held responsible for damage.

Don’t wait until you’re completing the paper work at a car rental counter to find out what sort of optional claim damage waiver coverage is offered. Most people don’t take the time to read, or fully understand, the small print explaining such conditions.

While the legal wrangles over claim damage waivers continue, there are some new technological developments that should save car renters time, if not money.

An automatic car return system, developed by Budget, is already in use at Chicago’s O’Hare Airport and is scheduled to be used extensively at Budget stations by the end of 1988.

The AutoFuel System features a device underneath rental cars that is linked to the auto’s odometer and fuel tank. Cars returned pass over a stationary instrument that records the auto’s identification number, mileage and fuel level. This information is transmitted to Budget’s computer system, and returns should be processed by the time car renters reach the counter.

Budget also has a new countertop computer “Driver’s Guide” system available at its San Francisco, Oakland and San Jose airport offices that is due to be introduced elsewhere this year.

You can punch in your destinations and get a printout map to take with you.

“There’s no charge, and the computer process isn’t very intimidating,” a Budget spokeswoman said. “The directions you get would be the same as you might get by stopping at a service station.”

National is using a system called “Paper-Less Express” that cuts down the rental process time through new countertop printers that issue streamlined airline-ticket-size documents. No credit card imprint is required. Five locations--Minneapolis, Memphis, Portland, Hartford and Richmond--have installed the system, which is expected to be nationwide by April, a National spokeswoman said.

Paperless Process

Alamo has a comparable system already in use.

National, to complete the paperless process, is installing cellular phones, activated by credit card, in its larger cars that will allow renters to process rentals from within the auto.

You will be able to go directly to a special area at the National station, pick a car and complete the rental process by phone. Afterward, you only have to display your driver’s license to a guard on duty. These cellular phones are available at the Houston and Dallas airport offices.

The roving staff of car rental companies, such as Hertz and Avis, are using hand-held computer terminals to enable customers to skip time-consuming visits to rental counters when returning cars. These portable terminals/printers also allow renters to get printed receipts at their cars.

Avis has this “roving rapid-return” equipment at 24 locations in the United States, not all at airports, and expects to have them at about 50 sites by the end of 1988. Hertz already has the units at 50 locations, with more anticipated.

Avis is seeking approval at some airports to install automatic “rapid-rental” machines that will enable travelers to set up a car rental at a city they are visiting prior to air departure, go directly to the car upon arrival and find a completed rental agreement on the car seat.

While you’re saving time through these computerized systems, don’t neglect to read all documentation carefully to make sure mistakes aren’t being made.