What Is the Graves Amendment and How Does It Affect Suing a Rental Car Company After a Car Accident?
The Graves Amendment is a federal law (49 U.S.C. § 30106) that protects rental car companies from being sued just because they rented a vehicle to someone who later caused a car accident. In other words, you generally cannot hold a rental company responsible for the driver’s negligence simply because they owned the car.
This law was passed to stop “vicarious liability” lawsuits against rental companies—cases where people tried to sue Hertz, Enterprise, or Avis only because their customer caused a wreck. Under the Graves Amendment, that type of claim is barred.
**So When Can You Sue a Rental Car Company?
(Yes, there are exceptions.)**
The Graves Amendment does not protect a rental car company if the injured person can prove the company was independently negligent. That means you must show the rental company did something wrong on its own, not just that it rented a car to a bad driver.
Here are situations where you may still have a viable claim:
1. Negligent Entrustment (Ignored Warning Signs)
If the rental company rented a car to someone they knew or should have known was unsafe—such as:
The driver had no valid driver’s license
The license was suspended or expired
The person was visibly intoxicated
The person was underage
Then the rental company can still be held liable for negligent entrustment.
2. Negligent Maintenance
The Graves Amendment does not protect a rental company if:
The car had worn tires,
Broken brakes,
Unrepaired recalls, or
Mechanical issues they knew about but ignored,
and those defects contributed to the crash.
3. Failure to Comply With State or Federal Safety Laws
If the rental car company violated:
Vehicle safety regulations
Maintenance standards
Inspection requirements
and that violation contributed to the accident, they can still be sued.
What Does This Mean for Your Texas Car Accident Case?
If you’re hit by a driver in a rental car, the rental company is usually not automatically responsible. Instead, you typically look to:
The insurance the driver purchased through the rental company,
The driver’s personal auto insurance, and
Your own UM/UIM coverage, if needed.
But if the rental company was negligent—for example, renting to an unlicensed driver or providing a dangerously defective vehicle—then the Graves Amendment does not shield them.
Bottom Line
The Graves Amendment blocks lawsuits against rental car companies just because they rented the car — but it does not give them a free pass when their own negligence contributed to the crash.
