You can be sure the consumer is in trouble when Big Business wants to be regulated.

In this case, the Big Four auto rental companies—Hertz, Avis, Budget, and National—are supporting a model bill that would force car renters to buy insurance that they don't need. Currently, most car rental companies offer renters the option of paying for a collision damage waiver. The waiver, which may cost as much as $13.95 a day, means that the rental company will "insure" against any damage that occurs while the car is in the renter's possession.

The model bill, which is supported by insurance commissioners from all 50 states, would require car companies to provide this insurance to all renters. The aim is to allay concerns that there's "too much deception, coercion, and intimidation in the car-rental business in the sale of the CDW," as a Hertz spokesman describes it. (Despite such altruistic concerns, however, all of the Big Four continue to offer the waiver as an option.)

The alleged abuse is the sale of insurance to customers who don't need it. Many renters are covered by their existing auto insurance policies, their employers' policies, or credit card companies. Anyone who rents a car with an American Express Gold Card, for example, receives at no charge exactly the same type of coverage offered by the car rental companies.

The proposed solution to this "problem"—some customers buying insurance that they don't need—could only be concocted in the mind of a bureaucrat: force all customers to buy insurance they don't need.

"The whole thing is a grand design to jack up rates," says Liz Clarke, public relations director for Alamo Rent-a-Car. Alamo has recommended that the waiver be available only to renters who do not have some alternative coverage. Forty small car-rental companies and licensees in California have formed a group to propose their own solution: eliminate the CDW altogether so that drivers must provide their own insurance.

By forcing all companies to raise rates, the Big Four can use government to give them refuge from underpricing by their competitors. If all rental companies raise their prices by the same dollar amount, then smaller companies with lower daily rates would be comparatively less attractive to consumers than the Big Four. And smaller companies might even be forced to raise their prices by more than the Big Four, since they might find it harder to self-insure. This is clearly a case where Big Government helps Big Business, and the informed consumer gets taken for an expensive (albeit doubly insured) ride.