Understanding the Graves Amendment

Posted on October 11th, 2016
By Greg Cusimano

Until 2005, when Congress passed the Graves Amendment, as part of an overall transportation bill, victims of car accidents could hold rental car agencies liable for the actions of the driver of a vehicle they owed. This was known as “vicarious liability” and many states had statutes allowing victims to sue fleet vehicle owners, rental car companies and others who leased cars if the driver caused an accident. The Graves Amendment was sought to address what some believed was an onerous burden for these agencies.

What the Graves Amendment Does

Rental car agencies in several states were at danger of being held liable if a car they rented or leased was involved in an accident. This was particularly true of the accident involved significant bodily injury or death. The amendment does require car rental agencies to ensure those whom they lease a vehicle to have minimum coverage in the event of bodily injury. While many states (like Florida) had far more stringent requirements, the maximums under the Graves Amendment are $10,000 bodily injury, $20,000 single crash and $10,000 property damage insurance coverage. Many argue this is insufficient, particularly for those who suffer major injuries.

Graves Amendment Does Not Offer Full Protection

It is important to remember that the Graves Amendment does not completely shield lease car companies. In fact, if a leasing or rental agency fails to maintain their vehicles in good working order they are still liable. This is called “independent negligence” and would result from bad tires, worn brakes or other mechanical problems that ultimately result in a driver being involved in an accident and causing injury.

Prior to the passage of the Graves Amendment, leasing companies were held financially responsible per many state laws for “vicarious liability”. In effect, this meant the leasing company had to maintain liability insurance on every vehicle they leased. The Graves Amendment eliminated much of this liability and as a result, leasing or rental agencies could only be held liable if they were negligent in some manner.

Another area which the Graves Amendment does not protect car companies is in the instance of a complimentary rental while the owner’s car is being repaired. Because there is no money being paid for the loaner vehicle, the Graves Amendment does not protect the company providing the vehicle. This means if the driver is involved in an accident, the company providing the vehicle may be held liable for injuries or damages to the victim.

Another important note about the Graves Amendment is for those victims who suffered injuries in a trucking accident. In many cases, truck drivers are leasing vehicles to drivers who are independent contractors. Because there are typically more than one layer of “ownership” your truck accident attorney will have to determine who may be liable and who may be shielded from liability by the Graves Amendment.

Impact of Graves Amendment on Victims

Assuming there was no criminal wrongdoing or negligence, the Graves Amendment states rental companies “…shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease…” For victims, this means their only recourse is the driver’s insurance. In no-fault states, this becomes even more complicated and in states like Florida or California where there are numerous out-of-country drivers this amendment is even more problematic. Only working with a personal injury attorney who understands the full impact of the Graves Amendment can victims determine the best way to proceed.

Anyone who has been involved in an accident involving another motor vehicle may be suffering devastating injuries. Contacting a personal injury attorney to determine whether you have the basis for a personal injury lawsuit is important. Because most states limit your ability to sue after specific periods of time, it is crucial to work with an attorney as soon as possible after your accident. Taos Injury Lawyers work with car and truck accident victims all over the United States. Contact a Taos injury lawyer in your state today.

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