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90_HB0844eng
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 Engrossed 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) The damage is caused intentionally or as a
7 result of willful, wanton, or reckless conduct.
8 (2) The damage arises out of the use of the vehicle
9 while under the influence of alcohol, drugs, a controlled
10 substance, or any other intoxicant that impairs driving
11 ability.
12 (3) The rental company entered into the rental
13 transaction based on fraudulent or materially false
14 information supplied by the renter.
15 (4) The damage arises out of the use of the vehicle
16 while engaged in the commission of a crime other than a
17 traffic infraction.
18 (5) The damage arises out of the use of the vehicle
19 to carry persons or property for hire, to push or tow
20 anything, while engaged in a speed contest, or for
21 driver's training.
22 (6) The damage arises out of the use of the vehicle
23 by a person other than an authorized driver.
24 (7) The damage arises out of the use of the vehicle
25 outside of the continental United States when that use is
26 not specifically authorized by the rental agreement.
27 (c) A rental company shall not charge more than $9 per
28 full or partial 24 hour rental day for a collision damage
29 waiver if the purchase cost of the rental vehicle, paid to
30 the dealer, is not greater than $30,000. A rental company
31 shall not charge more than $12 per full or partial 24 hour
32 rental day for a collision damage waiver if the purchase cost
33 of the rental vehicle, paid to the dealer, is greater than
34 $30,000.
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1 Section 20. Disclosure notice and advertising
2 requirements.
3 (a) Each renter who purchases a damage waiver that is
4 not included in the base rental shall be provided the
5 following disclosure notice:
6 NOTICE: This contract offers, for an additional
7 charge, a collision damage waiver to cover your financial
8 responsibility for damage to the rental vehicle. The
9 purchase of a collision damage waiver is optional and may
10 be declined. You are advised to carefully consider
11 whether to sign this waiver if you have rental vehicle
12 collision coverage provided by your credit card or
13 collision insurance on your own vehicle. Before deciding
14 whether to purchase the collision damage waiver, you may
15 wish to determine whether your own vehicle insurance
16 affords you coverage for damage to the rental vehicle and
17 the amount of deductible under your own insurance
18 coverage.
19 (b) The disclosure notice required in subsection (a)
20 shall be made on the face of the rental agreement either by
21 stamp, label, or as part of the written contract, shall be
22 set apart in boldface type and in no smaller print than 10
23 point type, and shall include a space for the renter to
24 acknowledge his or her receipt of the notice. The contract
25 shall also include in boldface type and in no smaller print
26 than 10 point type, in simple and readable language, any
27 other conditions and exclusions applicable to the collision
28 damage waiver.
29 (c) Any rental company who states or permits to be
30 stated the rental cost of a rental motor vehicle in any
31 advertisement shall state conspicuously, in plain language
32 and in conjunction with the advertised rental cost of the
33 vehicle, the daily rate of the applicable collision damage
34 waiver, that the rate constitutes an additional daily charge
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1 to the renter, that the collision damage waiver is optional,
2 and that prospective renters should examine their automobile
3 insurance policies for rental vehicle coverage.
4 (1) When a written advertisement, including all
5 print media, contains the statement of the rental cost of
6 a vehicle, the disclosure required by this subsection
7 shall be printed in type no less than 10 point type.
8 (2) When the video presentation of a television
9 advertisement contains the written statement of the
10 rental cost of a vehicle, the depiction of the disclosure
11 required by this subsection shall be no less than
12 one-third the size of the depiction of the rental cost.
13 (3) When a radio advertisement or the audio
14 presentation of a television advertisement contains the
15 statement of the rental cost of the vehicle, the oral
16 statement of the rental cost shall be immediately
17 accompanied by an oral statement of the disclosure
18 required by this subsection.
19 (d) Any rental company that makes any oral statement,
20 excluding telephonic communications, or written statement of
21 the rental cost of a vehicle shall disclose, in plain
22 language and in conjunction with that statement, the daily
23 rate of the applicable collision damage waiver and that the
24 rate constitutes an additional daily charge to the renter.
25 (e) Any rental company that offers the collision damage
26 waiver option to a renter shall inform the renter in posted
27 signs or in pamphlets, written in plain language, of all of
28 the information described in Sections 15 through 20. The
29 requirements of this subsection shall be deemed to be
30 satisfied if the rental company places the pamphlets or
31 posted signs prominently and conspicuously where the posted
32 signs and pamphlets may be easily seen or reached by renters.
33 Section 25. Mandatory charges.
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1 (a) As used in this Section, "mandatory charge" means
2 any charge, surcharge, or fee in addition to the base rental
3 rate for an item or service provided in connection with the
4 rental transaction that the renter does not have the option
5 of avoiding or declining and that is not otherwise imposed by
6 law.
7 (b) A rental agreement containing any mandatory charge
8 shall prominently display and fully disclose the charge
9 separately on the face of the agreement.
10 (c) A mandatory charge shall also be prominently
11 displayed and fully disclosed in all price advertising, price
12 displays, price quotes, and price offers, including displays
13 in computerized reservation systems.
14 (d) Notwithstanding the foregoing, a rental company may
15 not impose or require the purchase of a damage waiver as a
16 mandatory charge.
17 Section 900. The Illinois Vehicle Code is amended by
18 changing Section 6-305 and adding Section 6-305.2 as follows:
19 (625 ILCS 5/6-305) (from Ch. 95 1/2, par. 6-305)
20 Sec. 6-305. Renting motor vehicle to another.
21 (a) No person shall rent a motor vehicle to any other
22 person unless the latter person, or a driver designated by a
23 nondriver with disabilities and meeting any minimum age and
24 driver's record requirements that are uniformly applied by
25 the person renting a motor vehicle, is then duly licensed
26 hereunder or, in the case of a nonresident, then duly
27 licensed under the laws of the State or country of his
28 residence unless the State or country of his residence does
29 not require that a driver be licensed.
30 (b) No person shall rent a motor vehicle to another
31 until he has inspected the drivers license of the person to
32 whom the vehicle is to be rented, or by whom it is to be
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1 driven, and compared and verified the signature thereon with
2 the signature of such person written in his presence unless,
3 in the case of a nonresident, the State or country wherein
4 the nonresident resides does not require that a driver be
5 licensed.
6 (c) No person shall rent a motorcycle to another unless
7 the latter person is then duly licensed hereunder as a
8 motorcycle operator, and in the case of a nonresident, then
9 duly licensed under the laws of the State or country of his
10 residence, unless the State or country of his residence does
11 not require that a driver be licensed.
12 (d) (Blank). No person who rents a private passenger
13 motor vehicle to another shall, in rental agreements of 30
14 continuous days or less, hold any authorized driver liable
15 for any damage or loss to the rented vehicle exceeding $200
16 including loss of use and any costs and expenses incident to
17 the damage, loss or loss of use except where:
18 (1) the damage is caused intentionally by an
19 authorized driver or as a result of his willful or wanton
20 misconduct;
21 (2) the damage arises out of the authorized
22 driver's operation of the vehicle while intoxicated or
23 under the influence of any drugs;
24 (3) the damage is caused while the authorized
25 driver is engaged in any speed contest;
26 (4) the rental transaction is based on fraudulent
27 or false information supplied by the person to whom the
28 vehicle is rented;
29 (5) the damage arises out of the use of the vehicle
30 while committing or otherwise involved in a crime that
31 could be properly charged as a felony;
32 (6) the damage arises out of the use of the vehicle
33 to carry persons or property for hire or to push or tow
34 anything;
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1 (7) the damage occurs while the vehicle is operated
2 by a person other than an authorized driver; or
3 (8) the damage arises out of the use of the vehicle
4 outside of the continental United States unless such use
5 is specifically authorized by the rental agreement.
6 (e) (Blank). For the purposes of subsection (d) of this
7 Section, "authorized driver" shall mean the person to whom
8 the vehicle is rented; the renter's spouse if a licensed
9 driver who satisfies the rental company's minimum age
10 requirement; the renter's employer or co-worker if they are
11 engaged in business activity with the person to whom the
12 vehicle is rented, are licensed drivers, and satisfy the
13 rental company's minimum age requirement; any person who
14 operates the vehicle during an emergency situation or while
15 parking the vehicle at a commercial establishment; and any
16 person expressly listed by the rental company on the rental
17 agreement as an authorized driver.
18 (f) Any person who rents a motor vehicle to another
19 shall only advertise, quote, and charge a rental rate that
20 includes the entire amount except taxes and a mileage charge,
21 if any, which a renter must pay to hire or lease the vehicle
22 for the period of time to which the rental rate applies.
23 Such person shall not charge in addition to the rental rate,
24 taxes, and mileage charge, if any, any fee which must be paid
25 by the renter as a condition of hiring or leasing the
26 vehicle, such as, but not limited to, required fuel or
27 airport surcharges, nor any fee for transporting the renter
28 to the location where the rented vehicle will be delivered to
29 the renter. In addition to the rental rate, taxes, and
30 mileage charge, if any, such person may charge for an item or
31 service provided in connection with a particular rental
32 transaction if the renter can avoid incurring the charge by
33 choosing not to obtain or utilize the optional item or
34 service. Items and services for which such person may impose
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1 an additional charge include, but are not limited to,
2 optional insurance and accessories requested by the renter,
3 unless otherwise prohibited by subsection (d) of this
4 Section, service charges incident to the renter's optional
5 return of the vehicle to a location other than the location
6 where the vehicle was hired or leased, and charges for
7 refueling the vehicle at the conclusion of the rental
8 transaction in the event the renter did not return the
9 vehicle with as much fuel as was in the fuel tank at the
10 beginning of the rental. No collision damage waiver, or any
11 other type of waiver or insurance, may be offered and sold as
12 a separate charge which would provide coverage for a
13 deductible and any of the exceptions authorized by subsection
14 (d) of this Section.
15 (g) Every person renting a motor vehicle to another
16 shall keep a record of the registration number of the motor
17 vehicle so rented, the name and address of the person to whom
18 the vehicle is rented, the number of the license, if any, of
19 said latter person, and the date and place when and where the
20 said license, if any, was issued. Such record shall be open
21 to inspection by any police officer or designated agent of
22 the Secretary of State.
23 (h) A person licensed as a new car dealer under Section
24 5-101 of this Code shall not be subject to the provisions of
25 this Section regarding the rental of private passenger motor
26 vehicles when providing, free of charge, temporary substitute
27 vehicles for customers to operate during a period when a
28 customer's vehicle, which is either leased or owned by that
29 customer, is being repaired, serviced, replaced or otherwise
30 made unavailable to the customer in accordance with an
31 agreement with the licensed new car dealer or vehicle
32 manufacturer, so long as the customer orally or in writing
33 is made aware that the temporary substitute vehicle will be
34 covered by his or her their insurance policy and the customer
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1 shall only be liable to the extent of any amount deductible
2 from such insurance coverage in accordance with the terms of
3 the policy.
4 For purposes of subsection (d) of this Section, a person
5 licensed as a new car dealer under Section 5-101 of this Code
6 who rents a private passenger motor vehicle to another may,
7 in rental agreements of 30 continuous days or fewer, hold any
8 authorized driver liable for any damage or loss to the rental
9 vehicle for an amount not to exceed $1,000.
10 (i) This Section, except the requirements of subsection
11 (g), also applies to rental agreements of 30 continuous days
12 or less involving a motor vehicle that was delivered by an
13 out of State person or business to a renter in this State.
14 (Source: P.A. 88-661, eff. 9-16-94; 89-248, eff. 8-4-95.)
15 (625 ILCS 5/6-305.2 new)
16 Sec. 6-305.2. Limited liability for damage.
17 (a) Damage to private passenger vehicle. A person who
18 rents a motor vehicle to another may hold the renter liable
19 to the extent permitted under subsections (b) through (d) for
20 physical or mechanical damage to the rented motor vehicle
21 that occurs during the time the motor vehicle is under the
22 rental agreement.
23 (b) Limits on liability. The total liability of a
24 renter under subsection (a) for damage to a motor vehicle may
25 not exceed all of the following:
26 (1) The lesser of:
27 (A) Actual and reasonable costs that the
28 person who rents a motor vehicle to another incurred
29 to repair the motor vehicle or that the rental
30 company would have incurred if the motor vehicle had
31 been repaired, which shall reflect any discounts,
32 price reductions, or adjustments available to the
33 rental company; or
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1 (B) The fair market value of that motor
2 vehicle immediately before the damage occurred, as
3 determined in the customary market for the retail
4 sale of that motor vehicle; and
5 (2) Actual and reasonable costs incurred by the
6 loss due to theft of the rental motor vehicle up to its
7 fair market value, as determined by the customary market
8 for the sale of that vehicle; provided, however, that it
9 is established that the renter or an authorized driver
10 failed to exercise ordinary care while in possession of
11 the vehicle or that the renter or an authorized driver
12 committed or aided and abetted the commission of the
13 theft.
14 (c) Multiple recoveries prohibited. Any person who
15 rents a motor vehicle to another may not hold the renter
16 liable for any amounts that the rental company recovers from
17 any other party.
18 (d) Repair estimates. A person who rents a motor
19 vehicle to another may not collect or attempt to collect the
20 amount described in subsection (b) unless the rental company
21 obtains an estimate from a repair company or an appraiser in
22 the business of providing such appraisals on the costs of
23 repairing the motor vehicle, makes a copy of the estimate
24 available upon request to the renter who may be liable under
25 subsection (a), or the insurer of the renter, and submits a
26 copy of the estimate with any claim to collect the amount
27 described in subsection (b).
28 (e) Duty to mitigate. A claim against a renter
29 resulting from damage or loss to a rental vehicle must be
30 reasonably and rationally related to the actual loss
31 incurred. A rental company shall mitigate damages where
32 possible and shall not assert or collect any claim for
33 physical damage which exceeds the actual costs of the repair,
34 including all discounts or price reductions.
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1 (f) No rental company shall require a deposit or an
2 advance charge against the credit card of a renter, in any
3 form, for damages to a vehicle which is in the renter's
4 possession, custody, or control. No rental company shall
5 require any payment to the rental vehicle, upon the renter's
6 return of the vehicle in a damaged condition, until after the
7 cost of the damage to the vehicle and liability therefor is
8 agreed to between the rental company and renter or is
9 determined pursuant to law.
10 (g) If insurance coverage exists under the renter's
11 personal insurance policy and the coverage is confirmed, the
12 renter may require that the rental company must submit any
13 claims to the renter's personal insurance carrier as the
14 renter's agent. The rental company shall not make any
15 written or oral representations that it will not present
16 claims or negotiate with the renter's insurance carrier. For
17 purposes of this Section, confirmation of coverage includes
18 telephone confirmation from insurance company
19 representatives. After confirmation of coverage, the amount
20 of claim shall be resolved between the insurance carrier and
21 the rental company.
22 Section 999. Effective date. This Act takes effect upon
23 becoming law.