GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 324

Short Title:  No Collision Waivers - Short Leases.	(Public)
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Sponsors: Representatives Redwine; Hasty, Warner, and J. Crawford.
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Referred to:  Commerce.
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February 22, 1989

A BILL TO BE ENTITLED
AN ACT TO PROHIBIT THE SALE OF COLLISION DAMAGE WAIVERS BY RENTAL CAR COMPANIES IN CONNECTION WITH SHORT-TERM LEASES.
The General Assembly of North Carolina enacts:
Section 1.  General Statute Chapter 58 is amended by adding a new Article to read:
“ARTICLE 48.
"Collision Damage Waivers.
"§ 58-725.  Scope.
This Article applies to all persons renting vehicles from locations within this State.
"§ 58-726.  Purpose.
The purpose of this Article is to prohibit rental car companies from imposing liability upon renters, subject to certain stated exceptions; and to prohibit the sale of collision damage waivers in connection with rental agreements of 30 days or less.
"§ 58-727.  Definitions.
As used in this Article:
(1)	‘Authorized driver' means the person to whom the vehicle is rented; his spouse who is a licensed driver and who satisfies the rental car company's minimum age requirement; his employer or co-worker if engaged in business activity with the authorized driver who is a licensed driver and who satisfies the rental car company's minimum age requirement; any person who operates the vehicle during an emergency situation or parks the vehicle at a commercial establishment; or any person expressly listed by the rental car company in the rental agreement as an authorized driver.
(2)	‘Collision damage waiver' means any contract or contractual provision, whether separate from or a part of a rental agreement, whereby the rental car company agrees for a charge to waive any and all claims against the renter for any damages to the rented vehicle during the term of the rental agreement.
(3)	‘Damage' means any damage or loss to the rented vehicle, including loss of use and any costs and expenses incident to the damage or loss.
(4)	‘Rental agreement' means any written agreement setting forth the terms and conditions governing the use of a vehicle provided by the rental car company.
(5)	‘Rental car company' means any person in the business of providing vehicles to the public.
(6)	‘Renter' means any person obtaining the use of a vehicle from a rental car company under the terms of a rental agreement.
(7)	‘Vehicle' means a motor vehicle of the private passenger type, including passenger vans and mini-vans that are primarily intended for transport of persons.
"§ 58-728.  Prohibited practices.
(a)	No rental car company shall, in rental agreements of 30 continuous days or less, hold any authorized driver liable for any damage to the rented vehicle, except where:
(1) 	The damage is caused intentionally by an authorized driver or as a result of his willful and wanton misconduct;
(2)	The damage arises out of the authorized driver's operation of the vehicle while illegally under the influence of any impairing substance;
(3)	 The damage is caused while the authorized driver is engaged in any prearranged or spontaneous speed competition with another motor vehicle;
(4)	The rental transaction is based on information supplied by the renter with the intent to defraud the rental car company;
(5)	The damage arises out of the use of the vehicle where the vehicle is used in the commission of a felony or other other serious criminal act, other than minor traffic violations, wherein the vehicle is a means or operative tool of the criminal act, including transportation of illegal contraband or as a means of escape;
(6)	The damage arises out of the use of the vehicle to carry persons or property for hire;
(7)	The damage arises out of the use of the vehicle outside of the United States or Canada unless such use is specifically authorized by the rental agreement.
(b)	No action for damage may be brought by a rental car company against a renter who is a resident of the United States except in the state and county of the renter's primary residence.
(c)	No security or deposit for damage in any form, including credit card lines of credit, may be required or requested by the rental car company during the rental period or pending resolution of any dispute.  Security may be allowed only in such amounts to reasonably insure payment on the account or the return of the vehicle.
(d)	No waiver may be offered to provide coverage for any of the exceptions listed in subsection(a) of this section.  No deductible may be charged by the rental car company to the renter for damage to the rented vehicle.
"§ 58-729.  Agent licenses required.
No employee or other representative of a rental car company shall solicit or sell any kind of insurance in connection with a rental agreement unless he is duly licensed under Article 45 of this Chapter.
"§ 58-730. Penalty.
Any rental car company, found by the Commissioner after notice and hearing to have violated a provision of this Article, shall be subject to a civil penalty in the amount of five hundred dollars ($500.00) per violation.  Such penalty shall be payable to the Commissioner, who shall forward the clear proceeds of which to the General Fund of this State."
Sec. 2.  This act shall apply to rental agreements entered into on and after the effective date of this act.
Sec. 3.  This act shall become effective October 1, 1989.