Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jun 9, 2021

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It’s every mother’s nightmare and Cally Houck’s reality. Back in 2004, shortly after waving goodbye to her two kids, Raechel, 24 and her sister, Jacqueline, 20, news came that they had both been killed in a fiery head-on collision while driving from her home from Ojai to their home in Santa Cruz, California.

It was discovered that the cause of the crash lie in their rented 2004 Chrysler PT Cruiser which had previously been recalled for a power steering hose leak, but not yet repaired. After investigation, it was determined that the leak caused a fire and sent the car hurling over the median, then crashing head-on into a large freight truck.

Regulation to Rule Rental Agencies

After a five year long court case concluded in 2010, when, Cally Houck, was awarded $15 million in damages from the rental agency, Enterprise. But this mom took the issue to a higher level, winning the support of Congress to enact a Bill supported by U.S. Senators Barbara Boxer and Dianne Feinstein (both D-CA). The Bill (H.R. 6094) is on its way to Congress and is also getting major consumer groups and the media nationwide.

This legislation will require rental car companies not to rent cars that are under a safety recall until they have been serviced. If passed after the November 2012 elections, the NHTSA will have the ability to police and fine rental car companies if vehicles in the rental fleet are found to not have the proper recalls fixed.

This is already a law for used car retailers who are not allowed to sell a car on their lot until safety recalls have been addressed, but rental car companies sell cars too and this same regulation is not in place for them.

Rental Companies Fought the Change

Of course, this has been a major public relations issue for Enterprise, the largest car company in the U.S. which also owns Alamo and National. Enterprise originally denied liability in the case, but came around later to admitting that “their negligence was the sole proximate cause of the fatal injuries,” according to court documents.

The next largest agency, Hertz, claims to have always had the in-house policy of fixing recalled service issues before rentals were allowed. However, Avis and Dollar Thrifty, along with Enterprise, originally refused to support the bill unless it was watered down to allow the company to delay fixing cars with recalls while still keeping them in rental service.

Pressure to Comply

As publicity for the court case and the bill skyrocketed, the four largest car rental companies – Enterprise, Hertz, Avis/Budget and Dollar/Thrifty – which make up 93% of the rental car market, finally acquiesced. Each company signed a pledge sent to them earlier this year by Boxer and Feinstein. It states, “Effective immediately, our company is making a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied.”

Although the pledge does not bind the companies to any legal laws until the bill is passed, it is a public admission to their customers that this risk is no longer going to be in play when a car rental is made.

Enterprise Has a New Attitude

And Enterprise has done a complete turnaround on their attitude about the bill. Enterprise spokesperson, Laura Bryant has recently stated that the new regulations would “give consumers additional confidence that rental cars are safe to drive.”

“We now believe federal oversight, which will codify current practices and operational policies, will help to strengthen our industry safety efforts,” Bryant said. After a survey was done of their customers, Bryant said that it was clear some changes were in order. “At some point you realize if this is what your customers want, then you need to deliver.