Public Act 90-0113 of the 90th General Assembly
Public Act 90-0113
HB0844 Enrolled LRB9000396NTsb
AN ACT concerning rental vehicles.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Renter's Financial Responsibility and Protection Act.
Section 5. Legislative findings. The General Assembly
finds and declares the following:
(a) Amendments enacted in 1988 which limit negligent
drivers' liability for damage to vehicles rented from motor
vehicle rental companies to $200 have had the unintended,
anti-consumer effect of unfairly transferring most of the
costs of liability for renters' negligence to car rental
companies.
(b) This transfer of liability from negligent renters
has forced Illinois rental companies and dealers to
experience significant financial losses in the form of actual
costs to repair, service, and replace vehicles and loss of
economic opportunity by being deprived of the rental use of
damaged or destroyed rental cars; as a result, many Illinois
vehicle rental companies in Illinois have been forced to
close because of the current amendments, and high risk to
capital threatens to close existing companies; economic
losses have also resulted in Illinois renters paying daily
and weekly vehicle rental rates almost two-fold higher than
renters in other states, including those states surrounding
Illinois.
(c) As the vast majority of renters in Illinois are
non-Illinois residents, the increased damage costs of rental
car companies and dealers are absorbed and paid by all
Illinois consumers and business.
(d) The current law also threatens the public safety of
all Illinois citizens as it has contributed to an almost
three-fold increase in driver accident and fatality rates in
Illinois.
Section 10. Definitions. As used in this Act:
"Rental Company" means a person or entity that rents
private passenger vehicles to the public for 30 days or less.
"Renter" means a person or entity that obtains the use of
a private passenger vehicle from a rental company under terms
of a rental agreement.
"Rental Agreement" means an agreement for 30 days or less
setting forth the terms and conditions governing the use of a
private passenger vehicle provided by a rental company.
"Authorized Driver" means: the renter; the renter's
spouse if the spouse is a licensed driver and satisfies the
rental company's minimum age requirement; the renter's
employer, employee, or co-worker if that person is a licensed
driver, satisfies the rental company's minimum age
requirement, and at the time of the rental is engaged in a
business activity with the renter; any person who is
expressly listed by the rental company on the rental
agreement as an authorized driver; and any person driving
directly to a medical or police facility under circumstances
reasonably believed to constitute an emergency and who is a
licensed driver.
"Damage Waiver" means a rental company's agreement not to
hold an authorized driver liable for all or a part of any
damage to or loss of a rented vehicle for which the renter
may be liable pursuant to Section 6-305.2. "Damage Waiver"
shall encompass within its meaning other similar terms used
by rental companies, such as "Collision Damage Waiver", "Loss
Damage Waiver", "Physical Damage Waiver", and the like.
Section 15. Prohibited practices.
(a) A rental company may not sell a damage waiver unless
the renter agrees to the damage waiver in writing at or prior
to the time the rental agreement is executed.
(b) A rental company may not void a damage waiver except
for one or more of the following reasons:
(1) Damage or loss while the rental vehicle is used
to carry persons or property for a charge or fee.
(2) Damage or loss during an organized or agreed
upon racing or speed contest or demonstration or pushing
or pulling activity in which the rental vehicle is
actively involved.
(3) Damage or loss that could reasonably be
expected from an intentional or criminal act of the
driver other than a traffic infraction.
(4) Damage or loss to any rental vehicle resulting
from any auto business operation, including but not
limited to repairing, servicing, testing, washing,
parking, storing, or selling of automobiles.
(5) Damage or loss occurring to a rental vehicle if
the rental contract is based on fraudulent or material
misrepresentation by the renter.
(6) Damage or loss arising out of the use of the
rental vehicle outside the continental United States when
such use is specifically prohibited in the rental
agreement.
(7) Damage or loss occurring while the rental
vehicle is operated by a driver not permitted under the
rental agreement.
(c) A rental company shall not charge more than $9 per
full or partial 24 hour rental day for a collision damage
waiver if the manufacturer's suggested retail price of the
rental vehicle type is not greater than $30,000. A rental
company shall not charge more than $12 per full or partial 24
hour rental day for a collision damage waiver if the
manufacturer's suggested retail price of the rental vehicle
type is greater than $30,000. On January 1, 2000, the maximum
charges in this subsection (c) shall be increased to $9.50
and $12.50, respectively, and shall be subsequently increased
to $10 and $13 on January 1, 2001 and $10.50 and $13.50 on
January 1, 2002.
Section 20. Disclosure notice and advertising
requirements.
(a) Each renter who purchases a damage waiver that is
not included in the base rental shall be provided the
following disclosure notice:
NOTICE: This contract offers, for an additional
charge, a collision damage waiver to cover your financial
responsibility for damage to the rental vehicle. The
purchase of a collision damage waiver is optional and may
be declined. You are advised to carefully consider
whether to sign this waiver if you have rental vehicle
collision coverage provided by your credit card or
collision insurance on your own vehicle. Before deciding
whether to purchase the collision damage waiver, you may
wish to determine whether your own vehicle insurance
affords you coverage for damage to the rental vehicle and
the amount of deductible under your own insurance
coverage.
(b) The disclosure notice required in subsection (a)
shall be made on the face of the rental agreement either by
stamp, label, or as part of the written contract, shall be
set apart in boldface type and in no smaller print than 10
point type, and shall include a space for the renter to
acknowledge his or her receipt of the notice. The contract
shall also include in boldface type and in no smaller print
than 10 point type, in simple and readable language, any
other conditions and exclusions applicable to the collision
damage waiver.
(c) Any rental company who states or permits to be
stated the rental cost of a rental motor vehicle in any
advertisement shall state conspicuously, in plain language
and in conjunction with the advertised rental cost of the
vehicle, the daily rate of the applicable collision damage
waiver, that the rate constitutes an additional daily charge
to the renter, that the collision damage waiver is optional,
and that prospective renters should examine their automobile
insurance policies for rental vehicle coverage.
(1) When a written advertisement, including all
print media, contains the statement of the rental cost of
a vehicle, the disclosure required by this subsection
shall be printed in type no less than 10 point type.
(2) When the video presentation of a television
advertisement contains the written statement of the
rental cost of a vehicle, the depiction of the disclosure
required by this subsection shall be no less than
one-third the size of the depiction of the rental cost.
(3) When a radio advertisement or the audio
presentation of a television advertisement contains the
statement of the rental cost of the vehicle, the oral
statement of the rental cost shall be immediately
accompanied by an oral statement of the disclosure
required by this subsection.
(d) Any rental company that makes any oral statement,
excluding telephonic communications, or written statement of
the rental cost of a vehicle shall disclose, in plain
language and in conjunction with that statement, the daily
rate of the applicable collision damage waiver and that the
rate constitutes an additional daily charge to the renter.
(e) Any rental company that offers the collision damage
waiver option to a renter shall inform the renter in posted
signs or in pamphlets, written in plain language, of all of
the information described in Sections 15 through 20. The
requirements of this subsection shall be deemed to be
satisfied if the rental company places the pamphlets or
posted signs prominently and conspicuously where the posted
signs and pamphlets may be easily seen or reached by renters.
Section 25. Mandatory charges.
(a) As used in this Section, "mandatory charge" means
any charge, surcharge, or fee in addition to the base rental
rate for an item or service provided in connection with the
rental transaction that the renter does not have the option
of avoiding or declining and that is not otherwise imposed by
law.
(b) A rental agreement containing any mandatory charge
shall prominently display and fully disclose the charge
separately on the face of the agreement.
(c) A mandatory charge shall also be prominently
displayed and fully disclosed in all price advertising, price
displays, price quotes, and price offers, including displays
in computerized reservation systems.
(d) Notwithstanding the foregoing, a rental company may
not impose or require the purchase of a damage waiver as a
mandatory charge.
Section 900. The Illinois Vehicle Code is amended by
changing Section 6-305 and adding Section 6-305.2 as follows:
(625 ILCS 5/6-305) (from Ch. 95 1/2, par. 6-305)
Sec. 6-305. Renting motor vehicle to another.
(a) No person shall rent a motor vehicle to any other
person unless the latter person, or a driver designated by a
nondriver with disabilities and meeting any minimum age and
driver's record requirements that are uniformly applied by
the person renting a motor vehicle, is then duly licensed
hereunder or, in the case of a nonresident, then duly
licensed under the laws of the State or country of his
residence unless the State or country of his residence does
not require that a driver be licensed.
(b) No person shall rent a motor vehicle to another
until he has inspected the drivers license of the person to
whom the vehicle is to be rented, or by whom it is to be
driven, and compared and verified the signature thereon with
the signature of such person written in his presence unless,
in the case of a nonresident, the State or country wherein
the nonresident resides does not require that a driver be
licensed.
(c) No person shall rent a motorcycle to another unless
the latter person is then duly licensed hereunder as a
motorcycle operator, and in the case of a nonresident, then
duly licensed under the laws of the State or country of his
residence, unless the State or country of his residence does
not require that a driver be licensed.
(d) (Blank). No person who rents a private passenger
motor vehicle to another shall, in rental agreements of 30
continuous days or less, hold any authorized driver liable
for any damage or loss to the rented vehicle exceeding $200
including loss of use and any costs and expenses incident to
the damage, loss or loss of use except where:
(1) the damage is caused intentionally by an
authorized driver or as a result of his willful or wanton
misconduct;
(2) the damage arises out of the authorized
driver's operation of the vehicle while intoxicated or
under the influence of any drugs;
(3) the damage is caused while the authorized
driver is engaged in any speed contest;
(4) the rental transaction is based on fraudulent
or false information supplied by the person to whom the
vehicle is rented;
(5) the damage arises out of the use of the vehicle
while committing or otherwise involved in a crime that
could be properly charged as a felony;
(6) the damage arises out of the use of the vehicle
to carry persons or property for hire or to push or tow
anything;
(7) the damage occurs while the vehicle is operated
by a person other than an authorized driver; or
(8) the damage arises out of the use of the vehicle
outside of the continental United States unless such use
is specifically authorized by the rental agreement.
(e) (Blank). For the purposes of subsection (d) of this
Section, "authorized driver" shall mean the person to whom
the vehicle is rented; the renter's spouse if a licensed
driver who satisfies the rental company's minimum age
requirement; the renter's employer or co-worker if they are
engaged in business activity with the person to whom the
vehicle is rented, are licensed drivers, and satisfy the
rental company's minimum age requirement; any person who
operates the vehicle during an emergency situation or while
parking the vehicle at a commercial establishment; and any
person expressly listed by the rental company on the rental
agreement as an authorized driver.
(f) Any person who rents a motor vehicle to another
shall only advertise, quote, and charge a rental rate that
includes the entire amount except taxes and a mileage charge,
if any, which a renter must pay to hire or lease the vehicle
for the period of time to which the rental rate applies.
Such person shall not charge in addition to the rental rate,
taxes, and mileage charge, if any, any fee which must be paid
by the renter as a condition of hiring or leasing the
vehicle, such as, but not limited to, required fuel or
airport surcharges, nor any fee for transporting the renter
to the location where the rented vehicle will be delivered to
the renter. In addition to the rental rate, taxes, and
mileage charge, if any, such person may charge for an item or
service provided in connection with a particular rental
transaction if the renter can avoid incurring the charge by
choosing not to obtain or utilize the optional item or
service. Items and services for which such person may impose
an additional charge include, but are not limited to,
optional insurance and accessories requested by the renter,
unless otherwise prohibited by subsection (d) of this
Section, service charges incident to the renter's optional
return of the vehicle to a location other than the location
where the vehicle was hired or leased, and charges for
refueling the vehicle at the conclusion of the rental
transaction in the event the renter did not return the
vehicle with as much fuel as was in the fuel tank at the
beginning of the rental. No collision damage waiver, or any
other type of waiver or insurance, may be offered and sold as
a separate charge which would provide coverage for a
deductible and any of the exceptions authorized by subsection
(d) of this Section.
(g) Every person renting a motor vehicle to another
shall keep a record of the registration number of the motor
vehicle so rented, the name and address of the person to whom
the vehicle is rented, the number of the license, if any, of
said latter person, and the date and place when and where the
said license, if any, was issued. Such record shall be open
to inspection by any police officer or designated agent of
the Secretary of State.
(h) A person licensed as a new car dealer under Section
5-101 of this Code shall not be subject to the provisions of
this Section regarding the rental of private passenger motor
vehicles when providing, free of charge, temporary substitute
vehicles for customers to operate during a period when a
customer's vehicle, which is either leased or owned by that
customer, is being repaired, serviced, replaced or otherwise
made unavailable to the customer in accordance with an
agreement with the licensed new car dealer or vehicle
manufacturer, so long as the customer orally or in writing
is made aware that the temporary substitute vehicle will be
covered by his or her their insurance policy and the customer
shall only be liable to the extent of any amount deductible
from such insurance coverage in accordance with the terms of
the policy.
For purposes of subsection (d) of this Section, a person
licensed as a new car dealer under Section 5-101 of this Code
who rents a private passenger motor vehicle to another may,
in rental agreements of 30 continuous days or fewer, hold any
authorized driver liable for any damage or loss to the rental
vehicle for an amount not to exceed $1,000.
(i) This Section, except the requirements of subsection
(g), also applies to rental agreements of 30 continuous days
or less involving a motor vehicle that was delivered by an
out of State person or business to a renter in this State.
(Source: P.A. 88-661, eff. 9-16-94; 89-248, eff. 8-4-95.)
(625 ILCS 5/6-305.2 new)
Sec. 6-305.2. Limited liability for damage.
(a) Damage to private passenger vehicle. A person who
rents a motor vehicle to another may hold the renter liable
to the extent permitted under subsections (b) through (d) for
physical or mechanical damage to the rented motor vehicle
that occurs during the time the motor vehicle is under the
rental agreement.
(b) Limits on liability. The total liability of a
renter under subsection (a) for damage to a motor vehicle may
not exceed all of the following:
(1) The lesser of:
(A) Actual and reasonable costs that the
person who rents a motor vehicle to another incurred
to repair the motor vehicle or that the rental
company would have incurred if the motor vehicle had
been repaired, which shall reflect any discounts,
price reductions, or adjustments available to the
rental company; or
(B) The fair market value of that motor
vehicle immediately before the damage occurred, as
determined in the customary market for the retail
sale of that motor vehicle; and
(2) Actual and reasonable costs incurred by the
loss due to theft of the rental motor vehicle up to
$2,000; provided, however, that if it is established that
the renter or an authorized driver failed to exercise
ordinary care while in possession of the vehicle or that
the renter or an authorized driver committed or aided and
abetted the commission of the theft, then the damages
shall be the actual and reasonable costs of the rental
vehicle up to its fair market value, as determined by the
customary market for the sale of that vehicle.
For purposes of this subsection (b), for the period prior
to June 1, 1998, the maximum amount that may be recovered
from an authorized driver shall not exceed $6,000; for the
period beginning June 1, 1998 through May 31, 1999, the
maximum recovery shall not exceed $7,500; and for the period
beginning June 1, 1999 through May 31, 2000, the maximum
recovery shall not exceed $9,000. Beginning June 1, 2000,
and annually each June 1 thereafter, the maximum amount that
may be recovered from an authorized driver shall be increased
by $500 above the maximum recovery allowed immediately prior
to June 1 of that year.
(c) Multiple recoveries prohibited. Any person who
rents a motor vehicle to another may not hold the renter
liable for any amounts that the rental company recovers from
any other party.
(d) Repair estimates. A person who rents a motor
vehicle to another may not collect or attempt to collect the
amount described in subsection (b) unless the rental company
obtains an estimate from a repair company or an appraiser in
the business of providing such appraisals on the costs of
repairing the motor vehicle, makes a copy of the estimate
available upon request to the renter who may be liable under
subsection (a), or the insurer of the renter, and submits a
copy of the estimate with any claim to collect the amount
described in subsection (b).
(e) Duty to mitigate. A claim against a renter
resulting from damage or loss to a rental vehicle must be
reasonably and rationally related to the actual loss
incurred. A rental company shall mitigate damages where
possible and shall not assert or collect any claim for
physical damage which exceeds the actual costs of the repair,
including all discounts or price reductions.
(f) No rental company shall require a deposit or an
advance charge against the credit card of a renter, in any
form, for damages to a vehicle which is in the renter's
possession, custody, or control. No rental company shall
require any payment for damage to the rental vehicle, upon
the renter's return of the vehicle in a damaged condition,
until after the cost of the damage to the vehicle and
liability therefor is agreed to between the rental company
and renter or is determined pursuant to law.
(g) If insurance coverage exists under the renter's
personal insurance policy and the coverage is confirmed
during regular business hours, the renter may require that
the rental company must submit any claims to the renter's
personal insurance carrier as the renter's agent. The rental
company shall not make any written or oral representations
that it will not present claims or negotiate with the
renter's insurance carrier. For purposes of this Section,
confirmation of coverage includes telephone confirmation from
insurance company representatives during regular business
hours. After confirmation of coverage, the amount of claim
shall be resolved between the insurance carrier and the
rental company.
Section 999. Effective date. This Act takes effect upon
becoming law.