A Favor for All

Assemblyman Lloyd G. Connelly (D-Sacramento) is doing a favor for everyone who rents cars in California by challenging car rental company insurance practices with AB 4373, now scheduled for hearing before the Finance and Insurance Committee on Tuesday.

The heart of the matter is the collision damage waiver made available by auto rental companies at costs extravagantly greater than similar insurance purchased privately. The waiver is, in addition to being extremely expensive, often unnecessary, because many persons already are protected by their personal insurance policies, and the coverage of the protection can fall short of what many think they are buying because of loopholes.

Connelly’s bill would require conspicuous notice of these facts, also clarifying the circumstances under which the waiver may be voided by driver conduct. Furthermore, the waivers would be made subject to the Insurance Code so that the state could intervene if there were evidence of excessive rates or discriminatory practices.

The car rental companies themselves have invited legislative intervention by their refusal to be forthright about the waivers. Both Hertz and Avis refused an accounting of their waiver operations when questioned by our reporter, S. J. Diamond, last year. This is no small matter. Waivers cost about $8 or $9 a day; collision insurance is offered at an average of 47 cents a day by the California State Automobile Assn., according to Connelly. No wonder the car rental companies are “unable” to detail their cost accounting of the waiver.