Rental Car Accidents: Who Pays When You Crash a Rental?

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Someone hurt in a crash involving a rented car faces an owner that was not driving: the rental company, which a federal statute shields from claims based only on ownership, so the injured person may have to look to insurance instead. The rental company’s own negligence remains open to a claim, and Georgia’s minimum insurance rules and the injured person’s own uninsured motorist coverage fill in the rest.

The Graves Amendment Limits Claims Against the Rental Company

Under the federal Graves Amendment, a company in the business of renting or leasing motor vehicles is not liable under state law merely because it owns a rented vehicle, for harm arising from the vehicle’s use, operation, or possession during the rental, so long as there was no negligence or criminal wrongdoing on the part of the company or its affiliate (49 U.S.C. 30106(a)).

The statute is written around ownership, and it does not reach a claim that the rental company itself was negligent or engaged in criminal wrongdoing. Georgia treats negligent entrustment as capable of being a proximate cause of injury. In Zaldivar v. Prickett, 297 Ga. 589 (2015), the Supreme Court concluded “that negligent entrustment of an instrumentality can be a proximate cause of an injury to the person to whom the instrumentality was entrusted,” and it disapproved a Court of Appeals decision to the extent it suggested otherwise. Zaldivar concerned an employer that provided a truck to an employee, not a rental company.

The federal statute also leaves state financial responsibility law in place. It does not supersede state laws that impose financial responsibility or insurance standards on vehicle owners as a condition of registering and operating a vehicle, or state laws that impose liability on rental businesses for failing to meet state financial responsibility or liability insurance requirements (49 U.S.C. 30106(b)).

Georgia’s Minimum Liability Insurance

An owner of a vehicle required to be registered in Georgia, other than a self-insurer, may not operate it or let anyone else operate it without liability insurance equivalent to the security required by the Motor Vehicle Safety Responsibility Act (OCGA 33-34-4). That Act requires limits of at least the amounts in OCGA 33-7-11(a)(1)(A) (OCGA 40-9-37(a)): $25,000.00 for bodily injury to or death of one person in one accident, $50,000.00 for two or more persons, and $25,000.00 for property damage (OCGA 33-7-11(a)(1)(A)).

OCGA 40-6-10 does not state those limits; it addresses proof of insurance. It requires the owner or operator of a motor vehicle to “keep proof or evidence of required minimum insurance coverage in the vehicle at all times during the operation of the vehicle” (OCGA 40-6-10(a)(1.2)). It also lists what is acceptable on a temporary basis, including this: “If the vehicle is operated under a rental agreement, a duly executed vehicle rental agreement shall be considered satisfactory proof or evidence of required minimum insurance coverage” (OCGA 40-6-10(a)(2)(B)).

Fault Among the Drivers

If the injured person is partly responsible, the trier of fact sets that person’s percentage of fault, the judge reduces the damages in proportion, and a person 50 percent or more responsible recovers nothing; damages apportioned among defendants are not a joint liability (OCGA 51-12-33(a), (b), (g)).

For example, imagine a renter injured when another driver runs a stop sign, with a jury finding total damages of $50,000 and assigning 20 percent of the fault to the renter. The judge reduces the award by 20 percent, to $40,000. Had the jury assigned 50 percent to the renter, the renter would recover nothing.

Frequently Asked Questions

Does a renter’s own uninsured motorist coverage apply while driving a rental car?
The renter’s status as an insured is not tied to one car: the statutory definition covers the named insured and, while residents of the same household, the named insured’s spouse and relatives of either, whether or not they are in a motor vehicle at the time (OCGA 33-7-11(b)(1)(B)).

What makes the other vehicle “uninsured”?
A vehicle with no bodily injury liability and property damage liability insurance is uninsured, unless it is owned by or furnished for the regular use of the named insured or a resident spouse or relative; a vehicle with liability insurance can also be treated as uninsured under the statute’s coverage structures (OCGA 33-7-11(b)(1)(D)(i), (ii)).

Who counts as an “affiliate” of the rental company?
A person other than the owner that directly or indirectly controls, is controlled by, or is under common control with the owner, with control meaning the power to direct management and policies (49 U.S.C. 30106(d)(1)).

Does the Graves Amendment apply to a lawsuit over an older crash?
It applies to any action commenced on or after its enactment, regardless of whether the harm or the conduct that caused it occurred before that date (49 U.S.C. 30106(c)).

  • 49 U.S.C. 30106(a), (b), (c), (d)(1)
  • OCGA 33-34-4; OCGA 40-9-37(a); OCGA 33-7-11(a)(1)(A), (b)(1)(B), (b)(1)(D); OCGA 40-6-10(a)(1.2), (2)(B)
  • OCGA 51-12-33(a), (b), (g)
  • Zaldivar v. Prickett, 297 Ga. 589 (2015)

Disclaimer

This article provides general information about rental car accidents under federal and Georgia law. It is not legal advice and does not create an attorney-client relationship. Who pays after a rental car crash depends on the rental agreement, the insurance policies involved, and the facts of the crash. Anyone injured in a rental car crash, or facing a claim from one, should consult a licensed Georgia attorney about the particular situation.

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