What Is the Graves Amendment and How Can It Affect Car Accident Claims?

by Christopher Hoffmann on Feb. 16, 2018

Accident & Injury Accident & Injury  Car Accident Accident & Injury  Personal Injury 

Summary: The Graves Amendment is a federal law that can essentially negate vicarious liability.

When you rent a car in Missouri, the company will ask if you want to take out an additional rental insurance policy to cover yourself if you are at fault in an accident. People often make the mistake of assuming that if they are at fault for an accident in a rental car, their existing insurance coverage will cover both damages and injuries. If you aren’t sure about your policy and you turn down the additional coverage, though, it can be a huge financial mistake.


The Graves Amendment is a federal law that can essentially negate vicarious liability. “Vicarious liability,” at the state level, means that if you are borrowing someone else’s car and have their authority to do so, you are generally covered by the owner’s insurance. But the Graves Amendment excludes any cars that are loaned out, like rental cars. That means that if you are in an accident, the rental car company is not financially liable or responsible.


That is why it is so important to look at your own insurance policy to ensure that you are covered if you are driving a rental car. Some policies have exclusions for covering their customers when renting cars. If you don’t know about those exclusions and you decide not to take out the insurance offered by the rental agency, then you can be financially on the hook if you are in an at-fault accident. Read your policy thoroughly before you make the decision to say “Yes” or “No.”


Also, if you have only liability insurance, then even if you are covered for a car accident in a rental car, you might be responsible for any damage done to the rental car. Although your own injuries and the injuries and damages of the other driver will be covered by your insurance, if you don’t have collision insurance you may be obligated to pay for the property damage done to the rental car. In some instances, that can be financially devastating. If you have collision insurance, meaning that you took out additional coverage to cover your own vehicle, it is likewise critical to check with your company to be sure that it will cover a rental car.


When the rental company offers you additional insurance, it will typically protect you for both the damages and injuries done to the other driver and your injuries. It also usually covers the damages done to the rental car from bumper to bumper, which can be a huge relief. The small cost of the additional rental insurance might be well worth it, depending on your circumstances.


But before you make a decision about whether you need the insurance or not, it is imperative that you look over your car insurance policy or call your company to know exactly what your insurance will and will not cover if you are in a rental car.  If you are in an accident in a rental car in Missouri, it is critical to consult with an experienced St. Louis car accident lawyer to ensure that things go as smoothly as possible.


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