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Renting a car may seem simple – you sign some papers and get handed the keys. However, there are quite a few legal implications to be aware of if you are driving a rental vehicle. You want to ensure that you know what to do in the worst situation, like getting in an accident.

In an accident involving a rental car, the same rules of liability apply as in any other automobile collision – the driver who is at fault is liable for damages. A rental car company may only be held accountable if the accident was caused or worsened as a result of negligence on its part.

Whether you have been in a rental car accident or are making sure you are well informed before renting a car, keep reading. We will discuss what rental car companies are actually liable for, what you should do if you get in an accident with a rental car, and even cover extra insurance options you might want to look into while renting a car.

Who is liable in an accident involving a rental car?

Just like in any other car accident, the driver who is at fault is responsible for taking care of any damages incurred. Fault can be tricky to pin in more complicated accidents, so national laws are clear on what determines who is at fault. Most states follow the four basic fault levels: negligence, recklessness or wanton conduct, intentional misconduct, and strict liability.


Negligence is basically a fancy way of saying that someone didn’t quite take proper care or pay perfect attention when driving. This could include running a red light, failing to yield, or running through a stop. Basically, negligence covers common mistakes that are human errors and does not necessarily show a major lack of care or concern for others by the driver.

Recklessness or wanton conduct

Behaviors that fall under the umbrella of negligence can also be classified as recklessness or wanton conduct if the driver is behaving irresponsibly. All drivers on the road are legally obligated to care for others just as much as themselves, and when people drive erratically, speed, or show any other signs of being a wild driver, they are putting others at risk.

Intentional misconduct

The third level of fault is intentional misconduct meaning that your intentional actions can lead to an accident like driving drunk or under the influence of another drug.

Strict liability

Strict liability cases involved other factors, such as a defective traffic light.

The same rules and levels of liability and fault are followed in an accident involving a rental car. If the person driving the rental car is at fault, their personal insurance and any insurance that they bought with the rental company should cover the damages. On the other hand, if someone hits a rental car and is at fault, they are responsible for paying for the damages. In very few instances, rental companies are found at fault and liable in an accident.

What are rental companies liable for?

Under the Graves Amendment, which was passed in 2005, rental car companies have legal protection against injury-related claims in accidents with rental cars. However, there is an exception to federal law if the rental company's negligence directly contributed to a person's injuries. This negligence can come in the form of renting damaged or unrepaired vehicles or not keeping up with proper maintenance on the car.

For example, if a vehicle was returned to the rental car company with something malfunctioning, such as the brakes and left unrepaired, an accident occurred due to brake failure. In this and similar cases, the car rental companies would be liable for any damages.

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The other way that a rental company can be classified as negligent is if they failed to train or manage their employees correctly. This could entail that the employees were negligent in renting out the car, such as failing to verify your driver's license or renting a vehicle to someone whose license has been revoked or has a history of driving under the influence.

Basically, the things rental car companies are liable for can be consolidated under these three umbrellas:

  1. Negligent maintenance
  2. Negligent entrustment
  3. Failure to train or manage employees

A few things must be established for a rental car company to be held liable. First of all, you must establish that a rental car company has a duty of care for you that they broke. Second, you or others suffered injuries resulting from the company's negligence, and third, your injuries resulted in financial losses or damages.

Now before you go blaming your rental car company, there are a few things you need to be aware of. About 94% of accidents are caused by human error, meaning a very small percentage results from things the rental car company could be liable for. Before renting a car, you also want to ensure that your private insurance company covers you as a renter.

What do you need to do after a getting into a rental car accident?

If you are in an accident with a rental car, you need to follow the same stats as in any other accident. You will need to notify the police and exchange certain insurance information, contact witnesses and move all damaged vehicles out of the way of traffic if possible. You should also get that taken care of if medical treatment is needed. The only extra step you will have to do after a rental car accident is to contact the car rental company.

Insurance options to help protect you while renting

In addition to private insurance and insurance provided by the rental car company, you may purchase add-ons that offer extra legal protection while renting a car. You can buy protection in the form of a loss-damage waiver which covers the cost of towing or if the car is stolen or unusable. Another add-on you can purchase is personal accident insurance this covers any injuries caused in an accident it is similar to personal injury protection. If you travel and store luggage or other belongings in the rental vehicle, you may want to purchase coverage for personal effects.