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Wednesday, August 27, 1997

Enterprise to refund $1.7 million

By MICHAEL HOLMES / Associated Press Writer

AUSTIN (AP) -- Another rental car company has agreed to make refunds to Texans who purchased liability insurance coverage from it, bringing to $13 million the total of refunds due just over 1 million consumers.

"This order and the previous orders settle the dispute over sales of liability insurance by car rental companies," Insurance Commissioner Elton Bomer said Tuesday.

The latest action involves the five Enterprise Rent-A-Car companies operating in Texas.

In reaching agreement with the Texas Department of Insurance, Enterprise denied the department's allegations and said it had done nothing wrong.

The company agreed to refund $1.7 million to about 150,000 customers who bought supplemental auto and truck liability insurance from them in Texas between Jan. 1, 1995 and July 10, 1997, Bomer said.

In recent weeks, the state has announced similar consent orders with the Hertz, Avis, Alamo, Thrifty, Dollar, National and Budget car rental companies.

According to the latest order, the dispute with Enterprise centered on the sale of supplemental liability protection, a product that provides third-party liability insurance to the renter.

Under current state law, auto rental companies may sell collision and medical coverage to cover customers while they drive rented cars.

However, Jim Davis, a spokesman for the insurance department, has said companies for years improperly sold liability insurance to their Texas customers.

A recent change in state law will make it legal for the companies to sell liability coverage, but such sales before the Sept. 1 law change are illegal, Davis said.

Tuesday's agreement involves Enterprise Leasing of Houston; Enterprise Leasing Co. of DFW, based in Irving; Enterprise Rent-A-Car of Texas, based in San Antonio; Enterprise Leasing Co., based in Edmond, Okla.; and Enterprise Leasing Co.-West, based in Mesa, Ariz.

Refunds will vary, depending on the price of the insurance purchased.

The prices the Enterprise firms charged ranged from $5.99 to $9.99 per day. Refunds will range from $1.09 to $5.09 for each day of auto coverage purchased, and less for truck insurance.

Eligible customers need do nothing to obtain refunds, the insurance department said.

The companies automatically will mail payments to the last known address of all eligible customers shown in their records and will establish a procedure for dealing with changed addresses.