Rental cars are an excellent way for tourists to roam around a city and explore its attractions. It also gives them freedom and helps them avoid surging rates for Uber/Lyft rides. However, renting a vehicle comes with some risks. No matter how experienced a driver you are, driving on unfamiliar roads or even brake failure can increase the risk of a car accident for all parties involved.
When drivers get into an accident while driving their own vehicle, their car insurance company may cover the damages. But what is the law when they get into a car accident in a rental car loaned to them after their last wreck? Do they pay for damages involving the rented vehicle? Does their insurance company pick up the bill for injuries or property damage? Do they even provide full car rental coverage or some similar coverage to keep you off the financial hook?
Certain laws regulate rental car companies and provide guidance on liability in case of car accidents in a rental car. Let’s explore all the important details pertaining to rental car accidents with Ehline Law and our Southern California rental car accident lawyers.
Who Is Liable for a Car Accident Involving a Loaned Vehicle in California?
Under California Vehicle Code § 17150, the car owner is responsible for the accidents arising from the negligent operation of their motor vehicle, meaning even if you are not the one who caused an accident, you will be responsible for the damages if you loaned your vehicle to a friend who ended up in an accident due to reckless driving.
In California, car insurance follows the car and not the driver. If your friend to who you loaned a vehicle crashes it while speeding, you will be responsible for the damages, and your insurance company will have to cover the damages.
With that in mind, you may believe that the rental car company may pick up the bill for any damages in a car accident. However, that is not the case after the passing of the Graves Amendment in 2005.
Below, our award-winning personal injury attorneys will explain everything you must know about rental accidents. Make sure after reading this to install our accident app or write down our emergency number (833-LETS-SUE) and put it in your glove box in case of a crash to discuss additional steps.
Graves Amendment Overrules All State Laws Pertaining to “Permissive Use”
Previously, rental car companies were liable for damages arising from permissive use. There was a need for vicarious liability as defendants ended up paying unsustainably large settlements for accidents they didn’t even cause.
For example, in 2000, a driver renting a car from Budget Rent-a-Car hit a pedestrian, resulting in serious injuries leading to paralysis. The injured victim sued the driver, but Budget Rent-a-Car had to cover the damages in the end, even though the driver was responsible as they ran a red light.
The court awarded the injured victim $21 million, which Budget Rent-a-Car had to pay since the driver had no insurance.
In 2005, Congress passed a federal highway bill that included 49 U.S.C. § 30106, or the Graves Amendment, which bars vicarious liability claims against car rental companies for car accidents caused by the drivers renting the vehicle.
Understanding Rental Risk: Making Rental Car Companies Pay for Car Accidents
Although the Graves Amendment bars liability claims against rental car companies, injured victims can still pursue legal action if their accident occurred due to the rental car company’s negligence.
For example, if the rental car’s brakes fail due to a lack of inspection and routine maintenance, the rental car company may be responsible for the damages in the event of a car accident.
To have a valid personal injury claim against the rental car company, an accident victim must establish the following elements of negligence:
- The defendant (rental car company) owed the victim a duty of care.
- The rental car company breached its legal duty.
- The victim suffered injuries due to the rental car company’s negligence.
- The victim sustained damages.
According to the National Highway Traffic Safety Administration, 94% of all motor vehicle accidents happen because of driver error. It may involve decision errors, recklessness, and recognition errors. Some examples of driver error include speeding, failing to yield the right of way, texting while driving, or drunk driving.
A small percentage of accidents occur due to vehicle defects, manufacturer’s negligence, and lack of maintenance. Although the chances are slim, these accidents happen, and the unlucky driver may suffer serious injuries.
Whether you suffered injuries in a rental car due to the rental car’s negligence, or another driver’s fault, it is crucial to speak to an experienced personal injury attorney to discuss your case and learn more about your legal options.
Does Your Insurance Cover Your Rental Vehicle?
Typically, car insurance follows the car and not the driver. However, your insurance company may cover you if you’ve purchased additional liability insurance coverage, such as collision and comprehensive coverage. This add-on typically provides rental car coverage as well as liability coverage.
Besides additional insurance coverage, if you’ve paid by a credit card, your credit card company may provide primary or secondary coverage in the event of a rental car accident. Don’t rely on your credit card company to help you financially after the accident, as many do not cover liability insurance.
In some states, insurance companies offer personal accident insurance, which provides coverage for you when you sustain injuries. It is similar to personal injury protection (PIP) and covers medical expenses from a rental car accident.
Some rental car companies guide their clients on buying rental car insurance; if you’ve purchased one, the rental car insurance may kick in and pick up the bill.
If you have rental car reimbursement coverage, the insurance company may reimburse you for the rental car payment you made before the accident, regardless of fault.
Do You Have to Pay the Car Rental Company Even If You’re Not Responsible?
Regardless of who is responsible for a rental car accident, you may have to pay the deductible to the rental car company to start the repair work.
If you’re not responsible for the car accident, your auto insurance company will go after the responsible party to recover the damages incurred, including your deductible.
What to Do If You Have an Accident in a Rental Car
If you get involved in a rental car accident, it is essential to follow the steps below to protect your personal injury claim:
- Call for help and make sure you’re out of harm’s way.
- Exchange contact and insurance information with the other driver(s) involved.
- Gather evidence at the accident scene by taking photographs and videos. Capture the accident site, the vehicles involved, and the injuries sustained.
- Reach out to witnesses and request their contact information.
- Seek medical attention immediately after the rental car accident and follow the doctor’s treatment plan.
- Report the accident to your own insurance company and call the rental car company to inform them about the incident.
- Speak to an experienced personal injury attorney to discuss your case.
Schedule a Free Consultation with Ehline Law
We just learned everything you must know about suing a rental company, liability coverage from auto insurance, and even health insurance. Are you ready to obtain the most compensation possible under California law? Ehline Law is a premier personal injury law firm with over 15 locations across California and Texas. Our award-winning attorneys have more than 15 years of experience handling personal injury claims, including rental car accidents.
If you suffered injuries in a rental car accident due to another’s negligence, contact us at (833) LETS-SUE for a free consultation, as you may be able to seek compensation.