Since the Graves Amendment was enacted into federal law, rental car companies have been able to evade any vicarious liability for the negligent actions of their drivers. That means if you’re injured by someone driving a rental car, you can’t hold the owner of the vehicle responsible (as you normally would be able to under Florida law) unless the company was in some way directly liable for the accident.
What’s perhaps even more troubling is that there is no federal requirement mandating that vehicle renters purchase liability coverage on that vehicle. In fact, it isn’t uncommon for rental car companies to rent out their fleet to motorists who are not insured.
This means those injured by uninsured renters may find themselves with little recourse – unless they have uninsured/ underinsured motorist coverage. This was the scenario in the recent case of Martin v. Powers, weighed by the Tennessee Supreme Court. Here, plaintiff was battling his UM/UIM carrier because the company refused to find a rental vehicle “uninsured/ underinsured” for purposes of the policy. True, the vehicle was owned by a large, wealthy company. The problem was the only insurance to which plaintiff was entitled was a $25,000 liability policy maintained by the allegedly drunk driver – and that company wouldn’t pay either because it asserted the injury was intentionally inflicted. Continue reading