I am often times asked what happens if you are the victim of a collision caused by an uninsured or underinsured motorist driving a rental vehicle. The short answer is that unfortunately, victims in this scenario have little remedy for their injuries in Florida. This is because of the misleadingly-named Safe, Accountable, Flexible, and Efficient Transportation Equity Act. Before exploring this law and how it negatively impacts the injured in the state of Florida, it’s important to explore and define certain aspects of the law.
It has been long established law in Florida, that the owner of a motor vehicle will be vicariously liable for the negligence of the operator. For example, if I allowed my friend to borrow my vehicle, and the friend has an accident, both the friend and I, would be liable for the accident. The concept of vicarious liability passes the liability from the active operator or driver of the vehicle to the owner who may not even be present at the time of the accident.
The lynchpin of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act is the included provision known as the “Graves Amendment,” 49 U.S.C. § 30106, which calls for preemption and abolition of any state statute or common law precedent that held rental or leasing agencies vicariously liable for their driver’s negligence, except when the owner itself was negligent or engaged in criminal wrongdoing.
The car rental and leasing industries sought the Graves Amendment claiming that liability lawsuits were impeding doing business nationally. Because of the immunity the Graves Amendment grants said industry, it has become a hot button legal issue and is currently being contested in the courts. Before the Graves Amendment, if Hertz or Avis were the owners of the vehicle, the injured party would be assured enough insurance coverage for his injuries in the event that he sustained very serious injuries.
Under Section 324.021(9)(b), Florida Statutes, the financial liability of lessors and owners who rent or lend their vehicles to other permitted users, is capped. The lessee is required to carry insurance coverage of $500,000 combined for bodily injury and property damage. If this threshold is met, the lessors’ liability is limited to $100,000 per person, $300,000 per occurrence, and $50,000 for property damage.
That being said, rental car companies were still required to pay substantial sums in judgments prior to the enactment of the Graves Amendment. Lawyers representing individuals who were injured as the result of a rental car driver’s negligence understood the significance of being able to pursue the rental car company in tort for the injuries sustained. For Florida, a state with many uninsured drivers on the road, holding the rental car company liable under those circumstances was often the only way the victim could be fairly compensated for their injuries. However, in one fell swoop, the potential avenue for recourse outlined in Section 324.021(9)(b), Florida Statutes was preempted upon the passage of the Graves Amendment.
Section 324.021(7), Florida Statutes, does mandate an operator of a motor vehicle carry a minimum of $10,000 bodily injury, $20,000 single crash and $10,000 property damage insurance coverage after a collision involving bodily injury or risk the suspension of his license and all registrations of his vehicles. This provision passes scrutiny under the Graves Amendment. See Kumaarsingth v. PV Holding Corp., 983 So. 2d 599 (Fla. 3d DCA 2008) (recognizing that the statutory minimum financial responsibility requirement of the above statute still applied after the codification of the Grave’s Amendment).
Victims suffering a catastrophic injury as the result of the negligence of an uninsured driver who rents a car in Florida are offered little help under this provision. The rental car company’s only obligation may be to pay the minimum of the policy. Unless the rental car company was itself negligent—for example, in failing to verify that the lessee has a valid driver’s license—there is no further recourse against the rental car company for the injured party.
Rental car drivers, including those living out of the United States, do not have to meet any minimum insurance requirements. This is a problem when those drivers cause serious injuries due to their negligence. Explaining to your client that they have very little recourse under the law can be difficult.
It is now clear that the Graves Amendment preempts section 324.021(9)(b), Florida Statute in its current form, and that the legislature has yet to pass a bill requiring motor vehicle owners to carry minimum bodily injury coverage. Accordingly, educating drivers on the importance of having uninsured and underinsured motorist (UM) coverage is critical in order to protect your clients as well as other drivers on the road.
If you have an issue regarding the Graves Amendment or any accident involving a rental car or company, schedule a free consultation with Kovar Law Group today.