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90_HB0844enr
New Act
625 ILCS 5/6-305 from Ch. 95 1/2, par. 6-305
625 ILCS 5/6-305.2 new
Creates the Renter's Financial Responsibility and
Protection Act. Provides that a company that rents vehicles
for 30 days or less may offer a damage waiver to renters.
Provides that the person to whom the vehicle is rented must
sign the damage waiver at or before the time the rental
agreement is executed and must be given a disclosure notice.
Provides circumstances under which the damage waiver shall be
void. Provides for advertising and mandatory charge
requirements. Amends the Illinois Vehicle Code. Deletes
provisions concerning a rental company not holding an
authorized driver liable for any damage or loss to the rented
vehicle exceeding $200 except under certain circumstances.
Deletes provision prohibiting collision damage waivers.
Holds the renter of a motor vehicle liable for damage to the
rented vehicle with certain limitations. Effective
immediately.
LRB9000396NTsb
HB0844 Enrolled LRB9000396NTsb
1 AN ACT concerning rental vehicles.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Renter's Financial Responsibility and Protection Act.
6 Section 5. Legislative findings. The General Assembly
7 finds and declares the following:
8 (a) Amendments enacted in 1988 which limit negligent
9 drivers' liability for damage to vehicles rented from motor
10 vehicle rental companies to $200 have had the unintended,
11 anti-consumer effect of unfairly transferring most of the
12 costs of liability for renters' negligence to car rental
13 companies.
14 (b) This transfer of liability from negligent renters
15 has forced Illinois rental companies and dealers to
16 experience significant financial losses in the form of actual
17 costs to repair, service, and replace vehicles and loss of
18 economic opportunity by being deprived of the rental use of
19 damaged or destroyed rental cars; as a result, many Illinois
20 vehicle rental companies in Illinois have been forced to
21 close because of the current amendments, and high risk to
22 capital threatens to close existing companies; economic
23 losses have also resulted in Illinois renters paying daily
24 and weekly vehicle rental rates almost two-fold higher than
25 renters in other states, including those states surrounding
26 Illinois.
27 (c) As the vast majority of renters in Illinois are
28 non-Illinois residents, the increased damage costs of rental
29 car companies and dealers are absorbed and paid by all
30 Illinois consumers and business.
31 (d) The current law also threatens the public safety of
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1 all Illinois citizens as it has contributed to an almost
2 three-fold increase in driver accident and fatality rates in
3 Illinois.
4 Section 10. Definitions. As used in this Act:
5 "Rental Company" means a person or entity that rents
6 private passenger vehicles to the public for 30 days or less.
7 "Renter" means a person or entity that obtains the use of
8 a private passenger vehicle from a rental company under terms
9 of a rental agreement.
10 "Rental Agreement" means an agreement for 30 days or less
11 setting forth the terms and conditions governing the use of a
12 private passenger vehicle provided by a rental company.
13 "Authorized Driver" means: the renter; the renter's
14 spouse if the spouse is a licensed driver and satisfies the
15 rental company's minimum age requirement; the renter's
16 employer, employee, or co-worker if that person is a licensed
17 driver, satisfies the rental company's minimum age
18 requirement, and at the time of the rental is engaged in a
19 business activity with the renter; any person who is
20 expressly listed by the rental company on the rental
21 agreement as an authorized driver; and any person driving
22 directly to a medical or police facility under circumstances
23 reasonably believed to constitute an emergency and who is a
24 licensed driver.
25 "Damage Waiver" means a rental company's agreement not to
26 hold an authorized driver liable for all or a part of any
27 damage to or loss of a rented vehicle for which the renter
28 may be liable pursuant to Section 6-305.2. "Damage Waiver"
29 shall encompass within its meaning other similar terms used
30 by rental companies, such as "Collision Damage Waiver", "Loss
31 Damage Waiver", "Physical Damage Waiver", and the like.
32 Section 15. Prohibited practices.
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1 (a) A rental company may not sell a damage waiver unless
2 the renter agrees to the damage waiver in writing at or prior
3 to the time the rental agreement is executed.
4 (b) A rental company may not void a damage waiver except
5 for one or more of the following reasons:
6 (1) Damage or loss while the rental vehicle is used
7 to carry persons or property for a charge or fee.
8 (2) Damage or loss during an organized or agreed
9 upon racing or speed contest or demonstration or pushing
10 or pulling activity in which the rental vehicle is
11 actively involved.
12 (3) Damage or loss that could reasonably be
13 expected from an intentional or criminal act of the
14 driver other than a traffic infraction.
15 (4) Damage or loss to any rental vehicle resulting
16 from any auto business operation, including but not
17 limited to repairing, servicing, testing, washing,
18 parking, storing, or selling of automobiles.
19 (5) Damage or loss occurring to a rental vehicle if
20 the rental contract is based on fraudulent or material
21 misrepresentation by the renter.
22 (6) Damage or loss arising out of the use of the
23 rental vehicle outside the continental United States when
24 such use is specifically prohibited in the rental
25 agreement.
26 (7) Damage or loss occurring while the rental
27 vehicle is operated by a driver not permitted under the
28 rental agreement.
29 (c) A rental company shall not charge more than $9 per
30 full or partial 24 hour rental day for a collision damage
31 waiver if the manufacturer's suggested retail price of the
32 rental vehicle type is not greater than $30,000. A rental
33 company shall not charge more than $12 per full or partial 24
34 hour rental day for a collision damage waiver if the
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1 manufacturer's suggested retail price of the rental vehicle
2 type is greater than $30,000. On January 1, 2000, the maximum
3 charges in this subsection (c) shall be increased to $9.50
4 and $12.50, respectively, and shall be subsequently increased
5 to $10 and $13 on January 1, 2001 and $10.50 and $13.50 on
6 January 1, 2002.
7 Section 20. Disclosure notice and advertising
8 requirements.
9 (a) Each renter who purchases a damage waiver that is
10 not included in the base rental shall be provided the
11 following disclosure notice:
12 NOTICE: This contract offers, for an additional
13 charge, a collision damage waiver to cover your financial
14 responsibility for damage to the rental vehicle. The
15 purchase of a collision damage waiver is optional and may
16 be declined. You are advised to carefully consider
17 whether to sign this waiver if you have rental vehicle
18 collision coverage provided by your credit card or
19 collision insurance on your own vehicle. Before deciding
20 whether to purchase the collision damage waiver, you may
21 wish to determine whether your own vehicle insurance
22 affords you coverage for damage to the rental vehicle and
23 the amount of deductible under your own insurance
24 coverage.
25 (b) The disclosure notice required in subsection (a)
26 shall be made on the face of the rental agreement either by
27 stamp, label, or as part of the written contract, shall be
28 set apart in boldface type and in no smaller print than 10
29 point type, and shall include a space for the renter to
30 acknowledge his or her receipt of the notice. The contract
31 shall also include in boldface type and in no smaller print
32 than 10 point type, in simple and readable language, any
33 other conditions and exclusions applicable to the collision
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1 damage waiver.
2 (c) Any rental company who states or permits to be
3 stated the rental cost of a rental motor vehicle in any
4 advertisement shall state conspicuously, in plain language
5 and in conjunction with the advertised rental cost of the
6 vehicle, the daily rate of the applicable collision damage
7 waiver, that the rate constitutes an additional daily charge
8 to the renter, that the collision damage waiver is optional,
9 and that prospective renters should examine their automobile
10 insurance policies for rental vehicle coverage.
11 (1) When a written advertisement, including all
12 print media, contains the statement of the rental cost of
13 a vehicle, the disclosure required by this subsection
14 shall be printed in type no less than 10 point type.
15 (2) When the video presentation of a television
16 advertisement contains the written statement of the
17 rental cost of a vehicle, the depiction of the disclosure
18 required by this subsection shall be no less than
19 one-third the size of the depiction of the rental cost.
20 (3) When a radio advertisement or the audio
21 presentation of a television advertisement contains the
22 statement of the rental cost of the vehicle, the oral
23 statement of the rental cost shall be immediately
24 accompanied by an oral statement of the disclosure
25 required by this subsection.
26 (d) Any rental company that makes any oral statement,
27 excluding telephonic communications, or written statement of
28 the rental cost of a vehicle shall disclose, in plain
29 language and in conjunction with that statement, the daily
30 rate of the applicable collision damage waiver and that the
31 rate constitutes an additional daily charge to the renter.
32 (e) Any rental company that offers the collision damage
33 waiver option to a renter shall inform the renter in posted
34 signs or in pamphlets, written in plain language, of all of
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1 the information described in Sections 15 through 20. The
2 requirements of this subsection shall be deemed to be
3 satisfied if the rental company places the pamphlets or
4 posted signs prominently and conspicuously where the posted
5 signs and pamphlets may be easily seen or reached by renters.
6 Section 25. Mandatory charges.
7 (a) As used in this Section, "mandatory charge" means
8 any charge, surcharge, or fee in addition to the base rental
9 rate for an item or service provided in connection with the
10 rental transaction that the renter does not have the option
11 of avoiding or declining and that is not otherwise imposed by
12 law.
13 (b) A rental agreement containing any mandatory charge
14 shall prominently display and fully disclose the charge
15 separately on the face of the agreement.
16 (c) A mandatory charge shall also be prominently
17 displayed and fully disclosed in all price advertising, price
18 displays, price quotes, and price offers, including displays
19 in computerized reservation systems.
20 (d) Notwithstanding the foregoing, a rental company may
21 not impose or require the purchase of a damage waiver as a
22 mandatory charge.
23 Section 900. The Illinois Vehicle Code is amended by
24 changing Section 6-305 and adding Section 6-305.2 as follows:
25 (625 ILCS 5/6-305) (from Ch. 95 1/2, par. 6-305)
26 Sec. 6-305. Renting motor vehicle to another.
27 (a) No person shall rent a motor vehicle to any other
28 person unless the latter person, or a driver designated by a
29 nondriver with disabilities and meeting any minimum age and
30 driver's record requirements that are uniformly applied by
31 the person renting a motor vehicle, is then duly licensed
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1 hereunder or, in the case of a nonresident, then duly
2 licensed under the laws of the State or country of his
3 residence unless the State or country of his residence does
4 not require that a driver be licensed.
5 (b) No person shall rent a motor vehicle to another
6 until he has inspected the drivers license of the person to
7 whom the vehicle is to be rented, or by whom it is to be
8 driven, and compared and verified the signature thereon with
9 the signature of such person written in his presence unless,
10 in the case of a nonresident, the State or country wherein
11 the nonresident resides does not require that a driver be
12 licensed.
13 (c) No person shall rent a motorcycle to another unless
14 the latter person is then duly licensed hereunder as a
15 motorcycle operator, and in the case of a nonresident, then
16 duly licensed under the laws of the State or country of his
17 residence, unless the State or country of his residence does
18 not require that a driver be licensed.
19 (d) (Blank). No person who rents a private passenger
20 motor vehicle to another shall, in rental agreements of 30
21 continuous days or less, hold any authorized driver liable
22 for any damage or loss to the rented vehicle exceeding $200
23 including loss of use and any costs and expenses incident to
24 the damage, loss or loss of use except where:
25 (1) the damage is caused intentionally by an
26 authorized driver or as a result of his willful or wanton
27 misconduct;
28 (2) the damage arises out of the authorized
29 driver's operation of the vehicle while intoxicated or
30 under the influence of any drugs;
31 (3) the damage is caused while the authorized
32 driver is engaged in any speed contest;
33 (4) the rental transaction is based on fraudulent
34 or false information supplied by the person to whom the
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1 vehicle is rented;
2 (5) the damage arises out of the use of the vehicle
3 while committing or otherwise involved in a crime that
4 could be properly charged as a felony;
5 (6) the damage arises out of the use of the vehicle
6 to carry persons or property for hire or to push or tow
7 anything;
8 (7) the damage occurs while the vehicle is operated
9 by a person other than an authorized driver; or
10 (8) the damage arises out of the use of the vehicle
11 outside of the continental United States unless such use
12 is specifically authorized by the rental agreement.
13 (e) (Blank). For the purposes of subsection (d) of this
14 Section, "authorized driver" shall mean the person to whom
15 the vehicle is rented; the renter's spouse if a licensed
16 driver who satisfies the rental company's minimum age
17 requirement; the renter's employer or co-worker if they are
18 engaged in business activity with the person to whom the
19 vehicle is rented, are licensed drivers, and satisfy the
20 rental company's minimum age requirement; any person who
21 operates the vehicle during an emergency situation or while
22 parking the vehicle at a commercial establishment; and any
23 person expressly listed by the rental company on the rental
24 agreement as an authorized driver.
25 (f) Any person who rents a motor vehicle to another
26 shall only advertise, quote, and charge a rental rate that
27 includes the entire amount except taxes and a mileage charge,
28 if any, which a renter must pay to hire or lease the vehicle
29 for the period of time to which the rental rate applies.
30 Such person shall not charge in addition to the rental rate,
31 taxes, and mileage charge, if any, any fee which must be paid
32 by the renter as a condition of hiring or leasing the
33 vehicle, such as, but not limited to, required fuel or
34 airport surcharges, nor any fee for transporting the renter
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1 to the location where the rented vehicle will be delivered to
2 the renter. In addition to the rental rate, taxes, and
3 mileage charge, if any, such person may charge for an item or
4 service provided in connection with a particular rental
5 transaction if the renter can avoid incurring the charge by
6 choosing not to obtain or utilize the optional item or
7 service. Items and services for which such person may impose
8 an additional charge include, but are not limited to,
9 optional insurance and accessories requested by the renter,
10 unless otherwise prohibited by subsection (d) of this
11 Section, service charges incident to the renter's optional
12 return of the vehicle to a location other than the location
13 where the vehicle was hired or leased, and charges for
14 refueling the vehicle at the conclusion of the rental
15 transaction in the event the renter did not return the
16 vehicle with as much fuel as was in the fuel tank at the
17 beginning of the rental. No collision damage waiver, or any
18 other type of waiver or insurance, may be offered and sold as
19 a separate charge which would provide coverage for a
20 deductible and any of the exceptions authorized by subsection
21 (d) of this Section.
22 (g) Every person renting a motor vehicle to another
23 shall keep a record of the registration number of the motor
24 vehicle so rented, the name and address of the person to whom
25 the vehicle is rented, the number of the license, if any, of
26 said latter person, and the date and place when and where the
27 said license, if any, was issued. Such record shall be open
28 to inspection by any police officer or designated agent of
29 the Secretary of State.
30 (h) A person licensed as a new car dealer under Section
31 5-101 of this Code shall not be subject to the provisions of
32 this Section regarding the rental of private passenger motor
33 vehicles when providing, free of charge, temporary substitute
34 vehicles for customers to operate during a period when a
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1 customer's vehicle, which is either leased or owned by that
2 customer, is being repaired, serviced, replaced or otherwise
3 made unavailable to the customer in accordance with an
4 agreement with the licensed new car dealer or vehicle
5 manufacturer, so long as the customer orally or in writing
6 is made aware that the temporary substitute vehicle will be
7 covered by his or her their insurance policy and the customer
8 shall only be liable to the extent of any amount deductible
9 from such insurance coverage in accordance with the terms of
10 the policy.
11 For purposes of subsection (d) of this Section, a person
12 licensed as a new car dealer under Section 5-101 of this Code
13 who rents a private passenger motor vehicle to another may,
14 in rental agreements of 30 continuous days or fewer, hold any
15 authorized driver liable for any damage or loss to the rental
16 vehicle for an amount not to exceed $1,000.
17 (i) This Section, except the requirements of subsection
18 (g), also applies to rental agreements of 30 continuous days
19 or less involving a motor vehicle that was delivered by an
20 out of State person or business to a renter in this State.
21 (Source: P.A. 88-661, eff. 9-16-94; 89-248, eff. 8-4-95.)
22 (625 ILCS 5/6-305.2 new)
23 Sec. 6-305.2. Limited liability for damage.
24 (a) Damage to private passenger vehicle. A person who
25 rents a motor vehicle to another may hold the renter liable
26 to the extent permitted under subsections (b) through (d) for
27 physical or mechanical damage to the rented motor vehicle
28 that occurs during the time the motor vehicle is under the
29 rental agreement.
30 (b) Limits on liability. The total liability of a
31 renter under subsection (a) for damage to a motor vehicle may
32 not exceed all of the following:
33 (1) The lesser of:
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1 (A) Actual and reasonable costs that the
2 person who rents a motor vehicle to another incurred
3 to repair the motor vehicle or that the rental
4 company would have incurred if the motor vehicle had
5 been repaired, which shall reflect any discounts,
6 price reductions, or adjustments available to the
7 rental company; or
8 (B) The fair market value of that motor
9 vehicle immediately before the damage occurred, as
10 determined in the customary market for the retail
11 sale of that motor vehicle; and
12 (2) Actual and reasonable costs incurred by the
13 loss due to theft of the rental motor vehicle up to
14 $2,000; provided, however, that if it is established that
15 the renter or an authorized driver failed to exercise
16 ordinary care while in possession of the vehicle or that
17 the renter or an authorized driver committed or aided and
18 abetted the commission of the theft, then the damages
19 shall be the actual and reasonable costs of the rental
20 vehicle up to its fair market value, as determined by the
21 customary market for the sale of that vehicle.
22 For purposes of this subsection (b), for the period prior
23 to June 1, 1998, the maximum amount that may be recovered
24 from an authorized driver shall not exceed $6,000; for the
25 period beginning June 1, 1998 through May 31, 1999, the
26 maximum recovery shall not exceed $7,500; and for the period
27 beginning June 1, 1999 through May 31, 2000, the maximum
28 recovery shall not exceed $9,000. Beginning June 1, 2000,
29 and annually each June 1 thereafter, the maximum amount that
30 may be recovered from an authorized driver shall be increased
31 by $500 above the maximum recovery allowed immediately prior
32 to June 1 of that year.
33 (c) Multiple recoveries prohibited. Any person who
34 rents a motor vehicle to another may not hold the renter
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1 liable for any amounts that the rental company recovers from
2 any other party.
3 (d) Repair estimates. A person who rents a motor
4 vehicle to another may not collect or attempt to collect the
5 amount described in subsection (b) unless the rental company
6 obtains an estimate from a repair company or an appraiser in
7 the business of providing such appraisals on the costs of
8 repairing the motor vehicle, makes a copy of the estimate
9 available upon request to the renter who may be liable under
10 subsection (a), or the insurer of the renter, and submits a
11 copy of the estimate with any claim to collect the amount
12 described in subsection (b).
13 (e) Duty to mitigate. A claim against a renter
14 resulting from damage or loss to a rental vehicle must be
15 reasonably and rationally related to the actual loss
16 incurred. A rental company shall mitigate damages where
17 possible and shall not assert or collect any claim for
18 physical damage which exceeds the actual costs of the repair,
19 including all discounts or price reductions.
20 (f) No rental company shall require a deposit or an
21 advance charge against the credit card of a renter, in any
22 form, for damages to a vehicle which is in the renter's
23 possession, custody, or control. No rental company shall
24 require any payment for damage to the rental vehicle, upon
25 the renter's return of the vehicle in a damaged condition,
26 until after the cost of the damage to the vehicle and
27 liability therefor is agreed to between the rental company
28 and renter or is determined pursuant to law.
29 (g) If insurance coverage exists under the renter's
30 personal insurance policy and the coverage is confirmed
31 during regular business hours, the renter may require that
32 the rental company must submit any claims to the renter's
33 personal insurance carrier as the renter's agent. The rental
34 company shall not make any written or oral representations
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1 that it will not present claims or negotiate with the
2 renter's insurance carrier. For purposes of this Section,
3 confirmation of coverage includes telephone confirmation from
4 insurance company representatives during regular business
5 hours. After confirmation of coverage, the amount of claim
6 shall be resolved between the insurance carrier and the
7 rental company.
8 Section 999. Effective date. This Act takes effect upon
9 becoming law.