So, you were involved in a car accident, and one of the vehicles was a rental. Unfortunately, the conditions when a car rental agency is a liable party are few and far between. Many steps throughout the rental process and paperwork are set up expressly for the purpose of shielding the agency from liability.

Protections for the Rental Agency

There are a lot of built-in protections for car rental agencies. Understanding these protections is crucial if you want to know what your options are.

The Rental Agreement

Most rental agreements between a car rental agency and renter are set up to limit the liability for the company. Whenever the driver of the vehicle is responsible for an accident, this holds the blame on them, protecting the company.

It is vital to read rental agreements before signing because some will even make the renter solely responsible for any type of damage to the vehicle. This is meant to protect the agency from the cost of a hit-and-run or damage while the driver is not in the car.

If your rental car has been damaged, check your rental agreement to make sure you do not have to pay for rental days while it is being repaired. This is included in some agreements.

Primary and Secondary Liability Insurance

In many states, drivers must have liability insurance to operate any motor vehicle. Likewise, many car rental agencies must have liability insurance. In an accident involving a rental car, the driver’s insurance is triggered first and becomes the primary liability insurance. If the driver’s coverage can not cover all of the damages, only then will the agency’s insurance help.

Most rental agreements between a car rental agency and renter are set up to limit the liability for the company.


A precedent has been set that car rental agencies are not liable for negligent entrustment. This means if they rent a car to someone with a bad driving record, they are not liable. Rental agencies do not need to perform any sort of criminal or driving-specific background check before renting someone a car. To make them do so would place a large burden on the company.

Car Rental Agency Liability

There are a few conditions where a car rental agency is exposed to liability for injuries to the renter. These conditions look at negligence or shady business practices. Learn more about what a lawyer must prove in order to establish liability before deciding if you should take your situation to court.

Preexisting Conditions

If a rental vehicle has a dangerous flaw or necessary repair and the rental agency knows about it, they must fix it before renting out the vehicle again. If an agency employee rents out a dangerous or risky vehicle, they could be liable for the resulting injuries.

This can be hard to prove since you need to show there was a warning from a mechanic or a recall issued by the car’s manufacturer.

Lack of Maintenance

Car rental agencies must maintain their vehicles. If you can prove the agency or branch you used does not have or follow guidelines for routine inspections and maintenance, they may have missed a dangerous condition with the vehicle. This can help you prove the agency is liable for damages due to their negligence.


State and Federal Laws

If the state or federal laws were broken in the rental agreement or during the rental process, this could show that the agency is liable. For example, if a car rental agency allows a driver without a current driver’s license to rent and operate their vehicle, they have engaged in illegal business practice. If the agency has put a potentially untrained or dangerous driver on the road like this, they could share liability for the actions of that driver.

Other unethical and illegal business practices can open the rental agency to liability, too. Using defective auto parts or unlicensed employees to service their vehicles is another way some rental companies break the rules.

Should You Sue?

Everyone’s situation is unique somehow, so to plan your next steps, speak to a professional with legal experience about injury damages or liability.

Author’s Bio - Michelle Eddy

Michelle Eddy is a staunch consumer advocate, fresh libertarian convert, a mother of three, and a part-time blogger. She covers topics from parenthood and child development to education and law. With a strong emphasis on consumer rights and helping the little guy stand up for their rights. Her favorite quote is “Sir, we are outnumbered 10 to 1." "Then, it is a fair fight!"