Rental cars are a great convenience for people who are traveling or need transportation when their own vehicle is out of commission. With borrowing anyone’s car, even a rental car, comes the same responsibility and liability as driving your own vehicle. Until 2005, if you were driving a rental car and either hit a person or another car, then the rental agency could be sued for any resulting damages or injuries.
Before 2005, rental car companies were held liable for the actions of their customers through “vicarious liability.” Vicarious liability means that if you are the owner of the vehicle – even if you aren’t the one who is involved in the accident – you can still be held liable. Although vicarious liability is still used in accidents where people lend their cars to others, rental agencies are no longer held to it.
In 2005, there was a change to how rental companies could be held liable when someone rented their vehicles. The Graves Amendment was enacted to protect rental agencies from being sued. This law eliminated rental companies from being liable for any accident that resulted from their vehicles.
What is the Graves Amendment?
The Graves Amendment was initiated in 2005 as a federal highway bill, specifically created to protect rental agencies from being liable for either property damages or injuries caused by their clients. The only way that a rental car company can currently be held liable is if there is negligence on the company’s part that led to the accident. There are two conditions under which the Graves Amendment is applied:
- The owner or operator of the rental company’s sole purpose is to rent or lease motor vehicles to clients for money
- There is no sign that negligence on the part of the rental car owner is to blame for the accident (i.e., car damage or defect to the automobile or vehicle)
Most rental cars cross state lines frequently, so they are considered under the jurisdiction of interstate commerce. Therefore, the Graves Amendment is a federal law that trumps any individual state’s law of liability. It can also be used as a defense of liability in cases of trailers, trucks, and tractors, making them exempt from the laws of vicarious liability. In the past, it has also been extended to cover ride-sharing companies like Zipcar. There is still a gray area when it comes to dealerships and auto dealers who rent out cars or allow drivers to “test drive.”
Why was the Graves Amendment passed?
The Graves Amendment was initiated because many states didn’t have an exception for rental cars, so they used vicarious liability in rental accidents. That put rental car companies at a great disadvantage, and in many states, it made them unable to operate at all without risking huge costs. It was estimated that in New York alone, prior to the Graves law being passed, that an additional $100 million was being passed down to the consumers who rented cars, making it way too expensive for many populations.
What does the Graves Law mean for you?
If you are going to rent a car, then it is important for you to know what your own car insurance policy is regarding rental cars. If you aren’t sure what your insurance will cover, then it is a good idea to take out the supplemental insurance that rental car companies offer. When you rent a vehicle, in most instances, you will be held liable if you are at fault, and therefore you are responsible for any resulting property damage or injuries.
If the injuries or property damage were a result of the car’s malfunction or poor maintenance, then it is important for you to document it and make sure that you have the proof so that you aren’t left liable for something that isn’t your fault. Contact a car accident attorney Houston to get advice and potential representation if things get complicated with your claim. To be sure, if you are going to rent a car, know what your liability is and make sure that you aren’t leaving yourself vulnerable by not being properly insured.