Colorado's Legislature is passing a bill (HB17-1098) explaining financial liability for damage to rental vehicles. Most rental contracts state that rental agencies may collect for costs of repairs, towing expenses, and administrative fees. Recent controversy has related to “loss of use” fees, which cover agency losses when a vehicle is out of service for repair. Colorado law had not discussed this issue prior to a 2012 Supreme Court case. New York and Wisconsin have prohibited recovery of loss of use damages, and others have placed limits on the recoverable amount. This legislation will limit civil liability for the loss of use equal to the actual profits lost from the vehicle being out of service.
Koenig v. PurCo Fleet Services
Koenig rented a vehicle from National at the Durango Airport, signed their standard contract, and then damaged it in a collision. Koenig's auto insurance company paid the damage claim; however, refused to submit payment for the loss of use portion. The contract stated that Koenig was responsible for damages including repairs, diminished vehicle value, administrative fees, and loss of use. The lower courts had varying opinions regarding the loss of use provision, stating it lacked supportive explanation. The CO Supreme Court ruled that loss of use damages were recoverable based on quantifiable lost profit or rental value.
The Rocky Mountain Insurance Association states that rental agreements typically contain the following three responsibility provisions:
- Damage from fire, theft, collision, towing, and hazardous road conditions, regardless of fault.
- Injury or property damage caused by the renter
- Agency revenue loss from inability to rent the vehicle during repairs.
Personal Auto Policies
Many insurers cover rental car injuries and property damage within the liability limits. Policies with comprehensive and collision insurance sometimes apply to rented vehicles, but you should always review your specific policy.
Credit Card Protection
Some credit cards provide coverage for rental car damage. Many cards only provide secondary coverage for that which your auto insurance policy does not cover. If you confirm that your credit card provides primary coverage for rentals, you can waive rental agency insurance offerings.
If the rental is part of a significant trip or vacation, some may consider these four major types of travel insurance:
- Trip cancellation coverage
- Coverage for baggage and personal belongings
- Emergency medical situation coverage, such as a lengthy stay in a hospital abroad
- Accidental death coverage
Wrongfully Assigned Fault for Damage
Some disputes are from damage claims that renters were not responsible for. Most involved “car-sharing” services like Zipcar, which allow car pick up from street parking or other public locations. These vehicles are not agency inspected between rentals; therefore, you should check, document and photograph damages when initiating your rental.
If you or a loved one has endured an injury resulting from a vehicle collision, you should consider seeking input from an experienced personal injury attorney. The Law Firm of Jeremy Rosenthal has aggressively advocated for Colorado injury victims for many years. Contact the office today for a consultation.