Although it is now the “off-season” in Florida, we are a Mecca for tourists who often rent cars. Unfamiliarity with the vehicle and the local roads sometimes results in these tourists causing accidents. Unfortunately, if this occurs, recovery from the rental car company may be limited or nonexistent.
Generally speaking, when the owner of a motor vehicle allows someone else to use their vehicle, the owner is responsible for the negligence of the driver of the vehicle. This principle is called “vicarious liability.” The idea behind this legal theory is that a motor vehicle can be extremely dangerous if operated by someone who is an irresponsible driver, and by holding the owner responsible hopefully the owner will use good judgment in deciding who to allow to use their vehicle. When I first started practicing law over 30 years ago, this principle applied to rental car companies and rental car companies could be held responsible for the negligence of the driver of one of its vehicles.
This all changed, however, in 2005 when a law known as the “Graves Amendment” was passed by Congress. In a nutshell, this law did away with vicarious liability for rental cars. Lawyers representing injury victims in Florida raised challenges to the new law, claiming that it conflicted with existing Florida law. When the dust finally settled, after about eight years of litigation, the Florida Supreme Court ruled that rental car companies were entitled to the benefit of the Graves Amendment. Thus, anyone injured in Florida by a negligent driver of a rental car can no longer effectively pursue the claim against the rental car company and is often left with a claim against an uninsured or underinsured driver. Rental car companies will usually provide some minimal level of coverage, usually $10,000, which is often all that can be recovered unless the driver has a personal policy with additional coverage, or the driver has significant assets which makes the case worthwhile to pursue against the driver. The Graves Amendment is another reason why you should have adequate uninsured/underinsured motorist coverage under your own automobile vehicle policy. This coverage allows you to pursue a claim under your own policy for your injuries if the coverage available from the rental car company or the driver of the rental car is insufficient to fully satisfy your claim.