When a rental car (e.g. from Avis, Hertz, Enterprise, etc..) is involved in a car accident, and the driver is without their own insurance and does not purchase the optional auto insurance from the car-rental agency, does the Graves Amendment supersede Florida’s automobile financial responsibility laws? In short, unfortunately for the injured, the answer is yes:
In Fla. Stat. 324.021, subsection (9)(b)(1), Lessor’s who lease vehicles for 1 year or longer (i.e. typical car leasing companies) must require lessee’s to obtain no less than $100,000/$300,000 in bodily-injury liability and $50,000 in property damage or a $500,000 combined limit.
In Fla. Stat. 324.021(9)(b)(2): Lessor’s who lease/rents vehicles for under 1 year (i.e. car-rental companies) are liable (as owner of the vehicle) for the same limits as described above to the extend that the driver does not maintain same limits.
So one would think that if someone rents a car from Avis, Hertz, or Enterprise, and causes an automobile accident, without sufficient car insurance coverage, that the rental company should bear the burden of the financial responsibility for allowing an uninsured or underinsured driver on the road.
But the Florida Supreme Court, in Vargas v. Enter. Leasing Co., 60 So. 3d 1037 (Fla. 2011) ruled that the Graves Amendment supersedes Fla. Stat. 324.021(9)(b)(2) because (9)(b)(2) was (in the court’s opinion) a vicarious liability provision and not a financial-responsibility statute (even though the section literally has Financial Responsibility Laws as a subheading). Financial responsibility statutes, in their common/ordinary meaning, denote a minimum level of compulsory insurance as a condition of licensure and registration. In other words, because (9)(b)(2) does not require short-term lessors to purchase insurance, it is not a financial-responsibility statute….rather it’s a liability cap.
Vargas seems to overrule 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).
So what can drivers do to protect themselves? Undeniably, it is as important as ever to maintain uninsured motorists coverage. This protects you in the situation where another driver causes an accident but fails to maintain their own auto insurance (or only maintains a small bodily injury limit).