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 organization said the group is hoping New York's Gov. George Pataki will use his veto on a measure approved by the legislature that would make customers pay more for rental car damage.

Steve Harris, local counsel for the National Association of Independent Insurers made his comments concerning A.B.7422-A, a bill that changes the responsibility for rental car damage repairs.

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

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

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

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

Backers of the measure that won approval argue it will reduce rates elevated by the present law, which rental companies contend has forced small firms, who cannot afford the insurance involved from doing business.

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

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

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

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

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

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

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NAII Seeks Veto Of N.Y. Rental Car Bill

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