Read the small print before you drive off in that rental car. Read the small print before you drive off in that rental car.
Durban - Is it negligent to park a rental car on the street in a fairly upmarket residential suburb?
CMH First Car Rental believed it was, and told Sanera Maharaj of Durban she owed them more than R120 000 for a VW Polo Vivo which was stolen in late August.
Maharaj’s run of bad luck began a week earlier, when she had an accident in her car, that left her mother with a broken collarbone and her car undrivable.
Her insurance policy included car hire in such a situation, and she was directed to First Car, where she was told her liability in the event of damage to or theft of the car would be limited to R3000.
Off she drove to her sister’s flat in Morningside, where she’d been staying after the accident.
But when her brother-in-law left for work at 7am the next day, he noticed the Polo was no longer parked in the street outside.
She immediately reported the theft to the police and to First Car, returning the keys to the rental company. The same day she was e-mailed an invoice for the R3000 waiver, which she was expecting.
But little more than a week later, she received a letter of demand for R121 000, being the full value of the car.
“I was told that I was negligent in that I didn’t return the car keys,” she told Consumer Watch.
HIGH RISK
As is the case with most car rental companies’ contracts, the renter becomes liable for the full loss - rather than just the waiver amount - if they are deemed to have been negligent. Finally the keys were found, but that wasn’t the end of it - Maharaj was then told she was negligent in parking her car in a “high-risk” area.
Morningside is a fairly upmarket residential suburb, and Maharaj says she was by no means alone in parking her Polo in that street at night.
Panicked, she asked her insurance brokers for help, but was told to contact an attorney. Instead she turned to Consumer Watch.
Maharaj, a part-time student, said she had not been warned that if she parked the rental car overnight in a residential street she would be liable in full for the loss if it was stolen.
Responding, First Car Rental’s head of marketing, Melissa Storey, said “the absence of” the car keys always raised suspicion when a rental car was reported stolen by the renter, but in Maharaj’s case “it seems that it was a miscommunication due to too many parties being involved” and the key was eventually found.
But on scrutinising the reports relating to the theft of the car, the company had concluded that Maharaj had been negligent in parking the car where she did.
“Our terms state that we require the renter to safely secure our vehicle, and that the theft loss waiver does not cover driver negligence,” Storey said.
‘NOT SAFELY SECURED’
“The review team deduced that the vehicle was not safely secured and that the driver was therefore negligent due to the fact that Ms Maharaj felt that our vehicle was not safe in the location where it was parked, seeing that she felt the need to check on the status of the vehicle at 3am and again at 7 that morning.
“Second, her report that she filed later that day stated that the car was stolen from the building - which was untrue and therefore misleading in the review committee’s opinion and strengthening the case that the renter felt that the car was parked in an unsafe location.”
Defending their decision, Storey said that in 15 years of operation, only one out of 40 theft cases had resulted in “a negligence verdict”.
Storey said that the company had addressed its “internal communication process” relating to theft and damage cases to avoid “multiple contact points”.
“We believe that the process should have been more transparent to the customer. Unfortunately this would not have avoided the outcome of this case, but it will ensure a better overall after-the-fact customer experience in future.”
Had Maharaj parked that car outside a nightclub while she partied, would that have been deemed to have been negligent, I asked Storey.
Her response: “We look at each case within its own merit. I cannot talk to the facts of Ms Maharaj’s own vehicle make, model and year which may or may not have resulted in it being stolen.”
Uncomfortable with the negligence finding, under the circumstances, I went back to Maharaj for clarity on her written statement that the car had been stolen “from the building” as well as her checking on the car during that night.
“I should have been more specific in my wording,” she conceded.
“But I told the First Rental clerk in person, plus the staff member I phoned, and the police, that the car was stolen from the street outside the block of flats, so clearly I wasn’t trying to mislead anyone about that,” she said.
‘MISTAKES ON BOTH SIDES’
As for the claim that her checking on the car at 3am was evidence of her own concern for its security, Maharaj said she did not wake up to check on the car, but to help her sister feed the newborn baby.
“I was pacing in the lounge with him, trying to burp him, and I could see the car in the road below,” she said. “I mentioned that in my report to give some indication of when the car was stolen.”
I went back to Storey with this information. For me the crux of the case is that most people would interpret their responsibility to “secure” a hired vehicle as needing to ensure that it was locked.
I put it to Storey: “Ms Maharaj parked that Polo in an upmarket Morningside street, with other parked cars, as she had done many times before with her own car.
“Only at a stretch could that be regarded as negligent behaviour, certainly in the absence of any specific written or verbal instruction that the car was not to be left overnight in any public street.”
I’m happy to report that the company has since decided to absorb the loss of that Polo, rather than requiring Maharaj to pay that R121 000.
“I believe that mistakes were made on both sides,” Storey told Consumer Watch.
“Our committee worked with information available to them, didn’t relay information to all parties and, more importantly, not in writing, and Ms Maharaj didn’t provide much detailed information to make her case in the form of her report / statement; the kind of detail that certainly would have had a better outcome.
“I have made an executive decision to honour our original response - that Ms Maharaj is only responsible for the waiver amount.
“We will also not request Ms Maharaj to pay for the balance due on the excess, less fuel deposit, purely to avoid any further administration for any parties.”
rental cars are not insured
Car rental companies’ vehicles are not insured. The companies “self insure”, with their customers being made to pay “theft/loss waivers”, not to be confused with an insurance excess.
Consumers who pay a standard waiver will be made to pay a larger amount should the car be damaged or stolen, and if they opt for the more expensive “super” waiver, their liability is restricted to a relatively modest amount, as in Maharaj’s case. But the real risk lies in falling foul of the rental company contracts’ many exclusions, which cancel the waiver and leave the renter liable to pay for the full loss or repair bill.
An examination of the various rental companies’ terms and conditions reveal that the renter will be fully liable if they do obvious things - drive drunk or fail to adhere to rules of the road, for example.
But there are also some not-so-obvious “transgressions” which cancel the waiver: driving on “unsuitable” roads; driving through a “dust storm”, water or pothole damage, all undercarriage damage and failing to report damage or loss within a stipulated time.
Cape Times