The Livingston Law Firm, P.C.

Gerald W. Livingston, President

The following Newsletter is not intended to constitute legal advice but is offered merely as a guideline for general information and as promotional advertising for THE LIVINGSTON LAW FIRM, P.C. In specific cases involving your rights you should always consult an attorney. THE LIVINGSTON LAW FIRM, P.C., is available to assist you. Remember, there is no fee charged to speak with Gerald W. Livingston, about a potential case. A fee is arranged, usually on a contingency basis, only if the case is accepted for representation.

Avoiding a Big Problem When Renting a Car

The necessity often arises to rent a vehicle from a commercial car rental company. Most of us have done it from time to time. Commonly these occasions arise when one needs a replacement vehicle for a short period of time because their own has been damaged or totaled as the result of a motor vehicle collision, or is needed incident to air travel to another city; or one may want to rent a vehicle for a particular occasion or event.

              Whatever the reason to rent, there may be a Big Problem, if the Renter does not protect him/herself at the time the rental contract is signed by accepting what is commonly known in the trade as the “Optional Waver,” or just plain “Waver” Agreement.

              Such a waiver usually reads like the following taken from an Enterprise Leasing Contract:

Notice:  Your rental agreement offers, for an additional charge, an optional waiver to cover all or a part of your responsibility for damage to or loss of the vehicle.  Before deciding whether to purchase the waiver, you may wish to determine whether your own automobile insurance or credit card agreement provides you coverage for rental vehicle damages or loss and determine the amount of the deductible under your own insurance coverage.  The purchase of the waiver is not mandatory.  The waiver is not insurance.

              To get a good look at legal exposure when the vehicle is rented read what is usually printed on the reverse page of the rental contact.  The following additional provision is likely to appear or something like it:

Damage to, Loss or Theft of, Vehicle and related costs.  Renter accepts responsibility for damage to, loss or theft of, Vehicle or any part or accessory regardless of fault or negligence of Renter or any other person or act of God.  Renter shall pay Owner the amount necessary to repair Owner’s Vehicle.  However, if Vehicle is stolen and not recovered or Owner determines Vehicle is salvage, Renter shall pay Owner the fair market value less any sale proceeds.  For purpose of this Agreement, fair market value shall be the retail value of Vehicle immediately preceding the loss.  Damages for which Renter is also responsible include, but are not limited to:  Loss of use, claim administrative fees, diminishment of value, towing, storage or impound fees, and other costs incurred by Owner to recover Vehicle and to establish damages.  If Renter returns Vehicle during non-business hours or to any place other than the original rental office, Renter is responsible for any and all damages until an employee of Owner checks in Vehicle. SEE PARAGRAPH 15 FOR INFORMATION ON OPTIONAL DAMAGE WAIVER.

     These are pretty heavy terms and more often than not go unread by the Renter who declines the offer of all insurance not just the “Optional Waiver.”  Read the clause again. Notice it makes the Renter responsible no matter how or under what circumstances the rented vehicle is damaged or lost.  It even makes the Renter responsible for the actions of  God (Nature) or a thief.  It is a blanket promise that not only includes the cost of repair or replacement, but the value of the “loss of use” or rental value and a lot of other costs or expenses.

     “Loss of Use” means the money the company would make renting the car on a daily basis.  This can be a lot of money.  How many days might it take to get the vehicle repaired or for that matter before it can be replaced and the new vehicle put back into service?  If the potential number of lost days are multiplied times the rental value of the vehicle rented, it will add up to a large sum fast.

     Paragraph 15, more or less provides, if the “Optional Waiver” is accepted and purchased for an additional daily charge, the company will not come back on the Renter for loss or damage to the vehicle as outlined in the above paragraph, but it still leaves open matters of cost and expense.  There are certain conditions however that can void even the “Optional Wavier,” such as:

• If the damage is caused intentionally by an authorized driver or the result of willful and wanton misconduct of an authorized driver.
• the damages arise out of the use of the vehicle while under the influence of alcohol, illegal drugs, a controlled substance, or any other intoxicant that impairs driving ability;
• the rental company entered into the rental transaction based on fraudulent information supplied by the Renter;
• the damages arise out of the use of the vehicle while engaged in the commission of a crime other than a traffic infraction,
• the damage arises out of the use of the vehicle to carry persons or property for hire, to push or tow anything, to engage in a speed contest or for driver’s training; the damage arise out of the use of the vehicle by a person other than an authorized driver, or
• the damage arises out of the use of the vehicle outside the continental United States and the use is not specifically authorized by the rental agreement.

and the Damage Waver does not apply in Mexico.  Do not violate any of these conditions or you will not be protected and you will have wasted your money!

     With respect  Item No. 1 if you can anticipate that someone else will be driving the vehicle from time to time while in your care, be sure that person is listed as an additional driver or do not let them drive.  If you do and there is damage or loss, you will likely be held responsible under the general loss or damage clause.

     With respect to Item No. 3, this usually means, if the Renter presented some false information such as age, fake driver’s license or something of that sort to induce the rental company to rent the car, the “Optional Waiver” will not apply in the event of loss or damage to the vehicle.

     With respect to Item No. 4:  This means any crime other than a traffic ticket.  It could be driving while under the influence or attempting to evade arrest as well as more serious offenses involving the use of the vehicle.

The other Conditional Items listed are pretty much self explanatory.

     What does all this mean? Essentially, it means, if you are a Renter of a commercial vehicle and do not pay the additional charge to accept the “Optional Waiver,” and any damage is sustained or loss incurred to the vehicle while you have it, you will likely be in big money trouble.

     The author of this article is not in the business of selling insurance, but there are times when it makes good sense to have it and this is one of them. It is probably a good idea to accept and pay for the “Optional Waiver” when it is offered by the clerk and then be extremely careful not to void it by prohibited action.

     Just a few words about vehicle insurance. If one has a private policy of automobile liability, usually it will meet the minimal insurance requirements under safety responsibility laws of any state in which the Renter may be driving.  Liability insurance, to the extend of the dollar amount of coverage, protects the other guy, (including the rental Vehicle Owner, on some occasions) but not the Renter. 

If the Renter has private Uninsured/Underinsured Motorist, Collision, Personal Injury Protection, towing, and rental insurance coverage of his/her own, these will protect the Renter to the extent of the coverage, even in a rental vehicle. One should examine his/her automobile insurance policy to understand the amounts or limits of coverage with respect to each of these items of insurance coverage to understand them clearly.

     If the Renter does not have private motor vehicle liability insurance, Uninsured/Underinsured Motorist, or Personal Injury Protection it would be wise to consider purchasing them from the rental company to be applicable while operating a rental car.

     Read carefully the rental contract with respect to the Renter’s responsibility in the event of loss or damage to the vehicle and then make a considered decision to either take the risk by not accepting the “Optional Waiver” in the hope by crossing your fingers nothing will happen or if it can be afforded accept the “Optional Waiver” for some protection against the rental company coming back on the Renter, if loss of damage to the vehicle does occur for whatever reason.  In the opinion of the author, the last option is the best. 

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