Rental Car Company Liability

car rental liability - chicago injury lawyersDepending on the circumstances, rental car companies may be liable for injuries and death resulting from collisions involving their vehicles. In Illinois, rental car companies are generally not held responsible for collisions involving rented vehicles. This is because customers who rent vehicles are not considered agents or employees of rental car companies. However, under certain circumstances, rental car companies can be held responsible for unsafe practices or procedures. For example, Illinois law requires rental car companies to verify that customers renting their vehicles have a valid driver’s license.  625 ILCS 5/6-305.

If a rental car company knows or should know that a customer is not a licensed driver, the company may be held responsible if that customer is later involved in a collision with the rental vehicle. The Illinois Vehicle Code also requires all owners of for-rent motor vehicles to give proof of financial responsibility, and prescribes a minimum amount of insurance or cash reserves for renters to carry in order to protect injured third parties.  625 ILCS 5/9-101. The purpose of the financial responsibility insurance is to protect those who would otherwise be uninsured.

Under Illinois law, rental car companies can be held responsible for negligently entrusting a vehicle to a customer. Negligent entrustment of a vehicle is “where that person entrusts the vehicle to one whose incompetence, inexperience, or recklessness is known or should have been known by the entrustor of the vehicle.”

Watson v. Enterprise Leasing Co., 325 Ill. App. 3d 914, 921, 757 N.E.2d 604, 610 (1st Dist. 2001). The owner of a vehicle is liable for negligent entrustment where: (1) the owner entrusted his car to an incompetent or unfit driver, and (2) the incompetency was a proximate cause of the accident.

Taitt v. Robinson, 266 Ill. App. 3d 130, 132, 639 N.E.2d 893, 895 (5th Dist. 1994). Under negligent entrustment, implied permission to use a vehicle exists when a course of conduct or relationship between the parties includes a mutual agreement or lack of objection under the circumstances signifying permission, or the giving of consent.

Rainey By and Through Rainey v. Pitera By and Through Pitera, 273 Ill. App. 3d 234, 237, 651 N.E.2d 747, 749 (1st Dist. 1995).

Rental car companies can also be held responsible for voluntarily undertaking a duty to protect third persons. Voluntary undertaking means that one who undertakes to render services to another, gratuitously or for consideration, can be liable for injuries caused by failure to exercise due care when performing the undertaking.

Rhodes v. Illinois Cent. Gulf R.R., 172 Ill. 2d 213, 240, 665 N.E.2d 1260, 1273 (1996).

Each rental car company typically has its own internal rental policies and procedures. Their employees are trained and instructed to follow these rules when renting a vehicle. Often, rental car companies require multiple forms of identification or multiple contact numbers before releasing a vehicle to a customer. These policies and procedures are intended to promote the safety of third persons by releasing vehicles to licensed, competent, and responsible customers, and not renting vehicles to individuals who are likely to steal the vehicles or use them for unlawful purposes. By putting these policies and procedures in place, rental car companies voluntarily undertake a duty to ensure the safety of third persons.

Although Illinois does not generally hold rental car companies responsible for collisions involving rented vehicles, there are exceptions. Rental car companies may be responsible if they negligently entrust a vehicle to a customer or voluntarily undertake a duty to third persons by establishing internal policies and procedures. In these situations, rental car companies can and should be held liable for injuries and death.

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Article Co-Authored by Abbie Henry