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16 Pepp. L. Rev. 633 (1988-1989)
It Hertz to Be Number One: The Collision Damage Waiver Is Being Attacked on Multiple Fronts

handle is hein.journals/pepplr16 and id is 649 raw text is: It Hertz to Be Number One: The Collision Damage Waiver Is Being Attacked on Multiple Fronts I. INTRODUCTION In a popular advertisement of the 1980's, former professional foot- ball star O.J. Simpson would hurdle suitcases while going to his Hertz rental car at the airport. Nowadays, he would probably hurdle the collision damage waiver1 (CDW), which is undergoing a siege of legislative, bureaucratic, judicial, and public pressure for its regula- tion.2 The attacks on the waiver come from the United States Con- gress,3 several state legislatures,4 state attorneys general,5 state insurance officials,6 state and federal courts, as well as consumer groups and advocates.7 As a result, even some rental car companies are now supporting CDW regulation.8 1. The term collision damage waiver is also known as a loss damage waiver or a physical damage waiver. Taylor, Insuring Against Trip Cancellation, L.A. Times, Apr. 24, 1988, § 7, at 8, col. 1. While filling out car rental forms, a lessee can elect or decline to obtain the collision damage waiver which is the lessor's waiver of its right to look to the lessee for payment of collision-type damage. If the lessee accepts the waiver, the risk of any collision-type loss is shifted from the lessee to the lessor. Hertz Corp. v. Corcoran, 137 Misc. 2d 403, 520 N.Y.S.2d 700 (1987). 2. Diamond, Insurance Fees on Rental Cars Hit the Skids, L.A. Times, June 24, 1988, § 4, at 1, col. 1. 3. See H.R. 4855, 100th Cong., 2d Sess., 134 CONG. REC. E2045-46 (daily ed. June 16, 1988); see also infra notes 206-08, 224-26, 254, and accompanying text. 4. See infra notes 202-05, 209-13, 227-30, 247-53, 255-58 and accompanying text. 5. In March of 1988, a 17-member state attorneys general task force met with sev- eral car rental company representatives, the Federal Trade Commission, and the Asso- ciation of National Advertisers to examine proposals aimed at regulating abuses in the rental car industry. The 17 states represented at this meeting included California, Col- orado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Massachusetts, Minnesota, Missouri, New York, Pennsylvania, Rhode Island, Texas, Washington, and Wisconsin. Wade, Task Force Will Draft Guidelines to Reform Car Rental Practices, TRAVEL WEEKLY, Apr. 4, 1988, at 1. 6. In September and December of 1985, a task force from the National Associa- tion of Insurance Commissioners met and developed a model state bill to regulate col- lision damage waivers. The bill was drafted by Tony Schrader, Iowa's deputy insurance commissioner. Sturken, Officials Move Forward on Bill Regulating Colli- sion Damage Waivers, TRAVEL WEEKLY, Sept. 23, 1985, at 4. 7. The California State Automobile Association, which represents 2.6 million drivers, urged legislators to inform and protect lessors about the CDW and supported a bill that would regulate the CDW. Calif-Auto-Ass'n: Consumer Protection Notice for California Motor Vehicle Renters Urged by CSAA, BUS. WIRE, July 2, 1986. 8. The Hertz Corporation was the first rental company to ask for regulation of the CDW. Magenheim, Car Firms Back Move to End CDW, TRAVEL WEEKLY, May 19,

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