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Law Hancock Blog

What is the Graves Amendment?

Person renting a car

Have you ever wondered how Uber or Amazon can be responsible if one of their drivers causes a crash, but Hertz and Alamo are not liable if someone driving one of their rental cars causes a crash? Liability issues are different for rental car companies than rideshare apps, delivery companies, and shipping businesses because of the federal Graves Amendment. As Tampa injury attorneys, the Graves Amendment is something we’re familiar with.

Before the Graves Amendment

Before the Graves Amendment, which was enacted in 2005, the principle of “vicarious liability” was in effect for the rental car industry. This means that Hertz or Alamo might have been forced to pay when one of their rental car drivers injured someone while behind the wheel. Because of this, rental insurance rates got so high that more than a few rental car companies eventually went bankrupt.

What Does the Graves Amendment Say?

Since 2005, the Graves Amendment protects companies that “rent or lease” vehicles from being held vicariously liable for the negligent operation of those vehicles. The Graves Amendment holds car rental companies liable only for those accidents caused in their vehicles if a defect or mechanical failure was related to improper maintenance or other factors in their direct control, not the driver’s negligence. Prior to the Graves Amendment, if an injured motorist discovered that the driver who hit them was in a rental vehicle, their first course of action could be to sue the rental company. Now, if the accident was due to the negligence of the driver, accident victims will need to pursue compensation from the driver instead of the rental company.

However, if the driver of the rental vehicle had no insurance, the Graves Amendment requires the rental company to cover losses for injuries and property damage up to the minimum that state law requires. For example, in Florida, the rental company would need to cover up to $10,000 in property damages and $10,000 in bodily injury losses.

Direct Negligence & the Graves Amendment

The opposite of vicarious liability is direct negligence. There are three main types of direct negligence claims in these situations that can actually stick to a rental car company:

Graves Amendment FAQs

What if someone hits me while driving a “loaner vehicle” from the dealer while their car is being serviced?

The answer to this varies state by state and depends largely on the exact wording used in the loaner vehicle agreement. In Florida, pursuant to Florida Statute 324.021(9)(c)3, the dealership is treated as a rental car company. In other words, if a car dealership provides a “loaner vehicle” to a customer, and that customer negligently causes injury to another, the dealership cannot be held vicariously liable under the Graves Amendment.

Can the Graves Amendment override a city ordinance or state law?

Yes, because the Graves Amendment is federal legislation. That means for state laws and city ordinances to be valid, they must work within the scope of the Graves Amendment. The Florida Supreme Court affirms that the Graves Amendment pre-empts Florida law on the vicarious liability of rental car companies.

Need a Tampa Car Accident Attorney?

If you were involved in a car accident involving a rental car, our Tampa car accident lawyers from Hancock Injury Attorneys can help identify all sources of liability. This allows us to seek the compensation you deserve under the law from the proper parties. Please feel free to contact us today for a no-cost review of your case.