discount car rentals in orlando florida

INTRODucTION

In the first week of January 1998, a vacationer and his family arrived in Florida to start their two-week vacation. In need of a car, the vacationer went to one of the many rental car companies located at the airport’s main exit. To keep costs down, the vacationer rented the least expensive car and did not purchase the liability insurance option offered by the rental car company. He believed his personal automobile insurance would cover him in the event of an accident. Receiving his car, the vacationer and his family set out for their hotel.

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Perhaps preoccupied with anticipation, but unfortunately not paying attention, the vacationer ran a stop sign. Another car was struck and its driver was severely injured. Subsequently, the injured driver sued both the vacationer and the rental car company for her injuries. The vacationer tendered the defense of the action to his personal automobile insurance company. It, in turn, tendered the defense to the rental car company. The rental car company, however, declined to provide a defense to vacationer, advising the vacationer’s personal automobile insurer that under the terms of the rental agreement the insurer was required to provide primary coverage and a defense to its insured. The rental car company, thereafter, defended itself in the pending action.

Subsequently, the vacationer’s personal insurer commenced suit seeking a declaration concerning, as between itself and the rental car company, which was required to provide a defense and primary coverage. The determination of that question is at the crux of the issues presented by the secondary liability concept.’

The past several years have witnessed a continuing conflict between automobile rental companies and personal lines insurers over the emerging concept of secondary liability in automobile rental agreements.2 Reduced to its simplest form, secondary liability represents the conditional shifting of the responsibility for harm caused to third parties in automobile accidents from the owner of the rental vehicle to the driver or the driver’s insurer. The concept of secondary liability does not, as argued by some, seek to completely exonerate the rental car company from liability to the innocent victim of an automobile accident, nor does it seek to transfer the owner’s liability for such an occurrence to the operator or lessee. Rather, it is an attempt by the rental car companies to contractually place primary responsibility for an automobile accident resulting from the negligence of the operator upon the negligent party, the operator or lessee.

The purpose of this article is to analyze the concept of secondary liability as it is presently utilized by rental car companies as well as to review how courts have reacted to these disputes between rental companies and operators’ personal automobile liability insurers. To this end, the initial section of this article will briefly describe the historical context that gave rise to the implementation of the secondary liability provisions by rental car companies. Next, will be a description of how rental car companies incorporate the concept of secondary liability into their rental agreements and an illustration of the standard secondary liability provision. This article will then set forth the arguments advanced by those who advocate the secondary liability concept and will analyze the argument of insurers that clearly oppose the concept. Lastly, this article will analyze various court decisions that have had occasion to confront the issue and how those courts have determined the controversy.

II.

HISTORICAL CONTEXT

Historically, whether founded upon common law or state-enacted statute, responsibility for a permissive user’s negligent operation of a motor vehicle was generally imputed to the owner.3 Under this rule, in many states rental car companies were ordinarily held liable for the negligence of their renters.4 Thus, rental car companies were placed in a position in which they were not only obligated to defend themselves, but to defend and indemnify the negligent renter/ driver who was operating the motor vehicle with permission.

In most circumstances, however, the rental car company was not required to bear sole responsibility for the resultant harm as the operator, the real culpable party, was usually held jointly and severally liable with the owner.5 Rental car companies were, nevertheless, still placed in a position in which they were primarily obligated to defend and indemnify the negligent renter. A rental car company did possess certain indemnity rights against the operator of the motor vehicle either contractually under the terms of the rental agreement or under the common law. In most cases, however, it was required first to satisfy any judgment secured by the accident victim before it could seek to enforce its indemnity cause of action against the negligent operator.

discount car rentals in orlando florida