Issue Date:  -  Monday, 23 December 2002

Hire car insurance puts consumers on the wrong track.

Consumer complaints alleging deceptive and inadequate insurance cover on hire cars has led to a National Working Party that could see increased regulation in the hire car industry.

This highlights a warning from the Consumer Protection Commissioner to consumers who are planning to use hire cars this festive season.

"A disturbing number of consumers are signing rental contracts they do not fully understand resulting in unexpected financial costs being incurred", Patrick Walker said.

"Hire car contracts vary depending on the company although many use industry jargon presented in small print which would not be understood easily by the average person.

" Consumers are usually weary from long flights or very excited to be commencing their holidays when they are collecting hire cars and this leads to them agreeing to insurance contracts which may not meet their needs.

"Hire car desks at airports are often some distance from where the vehicles are collected and if consumers arrive at night it can be very difficult to inspect the vehicle to ascertain if there is any pre-existing damage.

"Similarly there are often insufficient staff to inspect vehicles on their return, for consumers to receive an assurance that there will be no additional charges or if charges for damage are to be levied exactly what they are for and how much they will be," he said.

The general belief that insurance arranged with hire car companies is similar to `comprehensive' policies of privately owned vehicles is wrong.

Hire car policies have exclusions that do not cover damage where another vehicle is not involved such as stone chips to paint, under body damage, colliding with animals, overhead damage from tree branches and rollovers.

One consumer had more than $2,000 taken from his credit card for repairs even though he had taken `additional' insurance. The damage happened when a curb was accidentally mounted in a driveway.

"We are naturally very keen for hire car insurance to be easy to understand and value for money and are participating in the National Working Party to push this position on behalf of consumers ", Commissioner Walker said.

When hiring a vehicle:

 - Don't let price be the only consideration
 - Try to get the terms and conditions when booking - if possible get the contract sent in advance
 - Take your time and read the contract carefully and ask questions if unsure
 - Have the company explain what `additional insurance' covers
 - Carefully examine the vehicle for existing damage before departing and report it
 - Ensure you understand any special conditions such as no unsealed roads and geographical restrictions such as beyond the 26th parallel

Contact Consumer Protection for further advice on telephone 1300 30 40 54.