NAII Seeks Veto Of N.Y. Rental Car Bill

By Daniel Hays

NU Online News Service, June 27, 11:50 a.m.EST?A representative of a national insurers organizationsaid the group is hoping New York's Gov. George Pataki will use hisveto on a measure approved by the legislature that would makecustomers pay more for rental car damage.

Steve Harris, local counsel for the National Association ofIndependent Insurers made his comments concerning A.B.7422-A, abill that changes the responsibility for rental car damagerepairs.

The present law, unique to New York, caps a renter's liabilityat $100 and prevents charges for collision damage waivers.

Under the measure, which was approved after a heavy lobby effortby rental car firms, the responsibility for damage repair costswould be transferred from the rental company to the customer.

NAII said the bill would impose additional costs onpolicyholders "and that's unfortunate for New York drivers,"commented Gerald L. Zimmerman, NAII senior counsel.

A similar bill was blocked last year, when it encounteredopposition from Assemblyman Alexander "Pete" Grannis, D-Manhattan,chairman of the Assembly Insurance Committee.

Backers of the measure that won approval argue it will reducerates elevated by the present law, which rental companies contendhas forced small firms, who cannot afford the insurance involvedfrom doing business.

Mr. Zimmerman complained that the Democrat-controlled Assemblyhad failed to act on auto insurance anti-fraud measures, but underthe rental car damage bill "found time to increase costs."

The bill removes the $100 cap on consumer liability for damageon rented vehicles; and permits rental companies to offer costlyoptional vehicle protection that would include any loss of use ofthe vehicle plus storage, towing or administrative charges.

"Under A.B. 7422-A, an innocent auto renter who has his vehiclestolen would bear full responsibility, an unprecedented increasefrom the current $100 liability," Mr. Zimmerman said."Additionally, consumers would be unable to accurately compare thepricing structure of rental car companies because the cost ofcollision would be excluded from the advertised base rental rate ofthe vehicle."

Mr. Harris said the group is hoping that Republican Gov. Pataki,who is up for election this year, will veto the bill because fouryears ago he vetoed a measure that would have increased theliability level to $500.

Mr. Harris said there is currently no timetable for when thebill will be sent to the governor.

NAII said it represents more than 700 member property-casualtycompanies writing $98 billion of premium annually and more than 44percent of the New York personal auto insurance market.