Rental car companies in Florida are not financially responsible for accidents involving customers driving the company’s vehicles, according to the Florida Supreme Court.
The court, in Rafael Vargas v. Enterprise Leasing Co., threw out a Florida law that said that rental companies could be liable for up to $500,000 when a customer caused an accident while driving a rental car. The court said the Florida law was preempted, or rendered ineffective, by a federal government law that says transportation companies are not financially responsible when a leased vehicle is involved in a wreck.
The court said that the federal Graves Amendment prohibits states from imposing “vicarious liability” on rental car companies. In Florida, the owner of a car may be liable if the car is involved in an accident. Long term leases, that run for more than a year, specify that the person leasing the vehicle from a car dealership is considered the “owner” for purposes of the law.
But the law regarding shorter term rentals, such as vacation or business trip leases, previously defined the “owner” of the vehicle as the car rental agency. This ruling makes it clear that the agency, even though it owns the car, is not responsible for the driver’s negligence.
Rental companies can still be responsible if the injured person proves that the company was negligent in renting the car to the person responsible for the accident. The rental company may also be liable if the accident is caused by a mechanical problem with the car. But, the court said, rental companies are off the hook when it comes to financial responsibility solely because they own the car.
In most circumstances, rental companies offer insurance to people leasing cars from the company. If the driver buys that rental insurance, the insurance company is responsible for damages in case of an accident. In many cases, rental drivers who have their own car insurance on a personal vehicle are also covered by those policies while driving rental cars.
