- The Washington Times - Monday, March 20, 2006

Rental car companies have started holding customers responsible for damage caused by “acts of nature or God” including fire, flood and hail.

Hertz Rent-A Car, the largest U.S. rental-car company, was the latest to change its policy when it began holding its Gold Club members responsible for such damage last month.

Under the new policy, listed on the contract, renters are responsible for fire and “acts of nature or God beyond [the renter’s] control,” including storm damage.

Other Hertz renters have been responsible for such damage since January 2005.

Spokesman Richard Broom says the company is adopting the industry standard.

“Renters are generally not going to be left with a large financial responsibility,” Mr. Broom said, referring to the coverage renters often receive from auto insurance or credit cards.

A spokeswoman for Avis and Budget did not return phone calls. But Charles Pulley, spokesman for Vanguard Car Rental USA, which owns National and Alamo, said both car companies hold renters accountable for acts of nature.

“Nothing has changed,” Mr. Pulley said. “The customer is responsible for the vehicle.”

This was not always the case, said Justin McNaull, a spokesman for auto club AAA.

Rental companies used to build the cost of natural disasters into the rental fees so that customers shared the cost equally, he said. AAA partners with Hertz in a discount rental program.

“At the end of the day, the overall cost to travelers might be the same, but the way that it is distributed through this sort of setup could be far more painful for the handful of renters that end up on the wrong end of it,” Mr. McNaull said.

The change by Hertz has alarmed public interest groups, including the Center for Auto Safety.

“Just because all the companies do it doesn’t make it a fair trade practice,” said Clarence Ditlow, the center’s executive director.

Rosemary Shahan, founder of Consumers for Auto Reliability and Safety, a nonprofit advocacy group, sees Hertz’s policy as one step in a larger trend.

“There is a general shifting of liability from insurers to consumers and government,” she said.

Hertz sells a separate “damage waiver” that covers customers in case of natural disaster. The cost varies. It runs $23.99 a day in Virginia, Maryland and the District.

Renters also can depend on their auto insurance or credit card to cover them. If a customer passes on the damage waiver and is not covered by auto insurance or a credit card, he must pay out of pocket for any damage.

Allstate, for instance, covers rental car damage in its comprehensive plan. Those without full coverage, typically those with older cars, are less likely to be covered.

Many credit card companies offer rental car insurance. MasterCard, for example, has MasterRental, which offers $50,000 coverage on damage to cars rented for 15 days or fewer. The bank issuing the card decides whether to include the free benefit.

But Mr. Ditlow warned that a customer will be “in for a hassle” even if he is covered by his own insurance or a credit card.

“At the end of the day this whole issue may be more about trying to get more consumers to pay for the exorbitant consumer damage waiver,” Mr. Ditlow said.

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