Liability for Car Rental Accidents Take a Turn from Corporations to Consumers

Closeup of car accident

When a person rents a car, he or she might assume that the rental company will be liable for any damages that are incurred as a result of an accident. Prior to August 10, 2005, that assumption would have been validated by the legal system. However, after former President George W. Bush had signed the Graves Amendment provision into federal law in 2005, the liability of car rental accidents shifted from car rental companies to consumers.

Car rental companies have gained tremendously from the Graves Amendment because it has significantly reduced the amount of lawsuits that the car rental industry had previously endured. In fact, the former litigious environment had bankrupted many car rental companies.

Florida is one of the many states that has benefited from the implementation of the Graves Amendment. Considering that Florida is the car rental capital of the world, the state has been able to save millions of dollars in settlement and legal fees since 2005.

Despite the perceived immunity that the Graves Amendment provides for car rental companies, it does not completely shield them from liability. If it can be proven in a court of law that a car rental company was at fault, then the rental company can lose a case. For example, if a car rental company does not conduct routine vehicle maintenance or rents a car to an ineligible customer, they can be held liable in a court of law.

It is important for drivers to understand that the Graves Amendment does not apply to non-rental vehicle owners. For example, if an individual allows their friend or relative to drive their car and an accident occurs in the absence of the vehicle owner, the owner is still responsible for the damages. This scenario is legally defined in Florida’s dangerous instrumentality declaration.

Paying more money for additional car rental insurance is the safest option for consumers. Even though the state of Florida requires car renters to have Personal Injury Insurance in the amount of $10,000 to cover property damage, it is highly recommended for renters to get Under Insured Motorist or Uninsured Motorist protection from the rental company. UIM and UM insurance is not the same as vehicle protection insurance, which is the standard insurance plan that rental companies solicit. UIM and UM insurance protects renters from uninsured drivers and from at-fault drivers who have low liability limits.

UIM and UM coverage fall under the category of Supplemental Liability Insurance. SLI covers medical expenses, compensation for pain and suffering, property damage and bodily injury to third party victims. Car rental patrons typically have to request SLI, UIM or UM insurance because car rental companies do not have an incentive to offer these options.

Related Posts
  • Common Causes of Car Accidents & Who's At Fault Read More
  • Are There More Delivery Truck Accidents Around the Holidays? Read More
  • Safety Tips When Driving During the Holiday Season Read More