A driver in a rental car runs a light and hits you. Your first thought is simple: the rental company owns the car, so the rental company should pay. In California, that is usually not how it works, and a Los Angeles court said so again on October 29, 2026.
The short answer is this. A rental company is usually not responsible just because it owns the car. Your claim is normally against the driver, and if that driver has no insurance, your own policy may be the place to look.
The New Ruling: O’Brien v. Midway Rent-A-Car
On October 29, 2026, the California Court of Appeal, Second Appellate District, decided O’Brien v. Midway Rent-A-Car, Inc. (case B342575). The case started in Los Angeles County Superior Court. A man rented a car from Midway, and three days later he was in a crash with the plaintiff. The plaintiff sued the driver and the rental company.
The plaintiff tried two ways to hold the rental company responsible. The first was a California law that can make a car owner pay for a driver who uses the car with permission. The second was a claim that Midway was careless because it rented the car without checking whether the renter had insurance. The court rejected both and ruled for Midway. The opinion was certified for publication, which means other California courts can rely on it.
Why Owning the Car Is Usually Not Enough
California Vehicle Code section 17150 says every owner of a motor vehicle is liable for injury caused by the careless driving of anyone using the car with the owner’s permission. For most car owners, that rule still matters. If you lend your car to a friend, you can be on the hook.
Rental companies are different because of a federal law called the Graves Amendment (49 U.S.C. section 30106). It says a company in the business of renting or leasing vehicles is not liable under state law just because it owns the car, as long as the company itself was not negligent and did nothing criminal. The court held that this federal law overrides section 17150 when the owner is a rental company. An earlier 2026 case, Tavares v. Zipcar, Inc., reached the same result, and the O’Brien court agreed with it.
The Exception People Miss: The Company’s Own Mistakes
The Graves Amendment protects a rental company only when there is no negligence or criminal wrongdoing by the company. The court gave two examples of when the protection would not apply:
- A rental company employee causes the crash.
- The company negligently entrusts the car to a renter, meaning it hands the keys to someone it knew, or should have known, was unfit to drive.
Negligent entrustment is hard to prove. In O’Brien, the renter had a driver’s license, matched the photo on it, and did not seem unfit to drive. There was no evidence the company knew of any reason he should not be behind the wheel.
Does a Rental Company Have to Check the Renter’s Insurance?
No, according to this ruling. The plaintiff argued that renting to someone without proof of insurance was careless in itself. The court said no California law requires a rental company to check whether a renter has auto insurance, and that creating a new duty like that is a job for the Legislature, not the courts.
The court pointed to what the law does require. Vehicle Code section 14608 says a company may not rent a car to someone unless that person has a valid license and the company has inspected it and compared the signature or photo. A separate section requires the company to keep a record of the renter’s license. Checking insurance is not on that list.
If the Rental Driver Had No Insurance, Look at Your Own Policy
This part of the opinion is worth reading closely. The plaintiff argued that if rental companies never pay, injured people could lose access to their own uninsured motorist coverage. The court did not accept that argument. It explained that uninsured motorist coverage exists to put you in about the same place you would be in if the at-fault driver had carried the minimum insurance the law requires, and it said the plaintiff did not explain why that coverage would not apply when the negligent driver was uninsured.
In plain words, the court suggested that a renter with no insurance can still be treated as an uninsured driver under your own policy. Whether your policy has that coverage, and how much, depends on what you bought. Pull out your declarations page and look for uninsured motorist bodily injury coverage.
What to Do After a Crash With a Rental Car in Los Angeles
A few steps can protect your options, whoever ends up paying:
- Get the driver’s name, license number, and insurance information, plus the rental company’s name and the car’s plate number.
- Ask the driver whether they bought insurance at the rental counter, and write down what they say.
- Get the police report. Our guide on how to get your CHP or LAPD crash report in Los Angeles walks through the steps.
- Tell your own insurance company about the crash, even if you think the other driver is at fault.
- Get medical care and keep every bill and record.
A claim against the at-fault driver is often handled by that driver’s insurer. Our post on third-party injury claims in California explains how that kind of claim works.
How Long You Have to File an Injury Case in California
In most California injury cases, Code of Civil Procedure section 335.1 gives you two years to file a lawsuit for an injury caused by someone else’s wrongful act or neglect. Some cases have shorter deadlines. If a city or county vehicle was involved, for example, a government claim usually must be filed first, as explained in our post on crashes with Caltrans or city vehicles.
Common Questions About Rental Car Crashes
Can I ever sue the rental company?
Possibly, if the company itself did something wrong, such as an employee causing the crash or the company renting to someone it knew or should have known was unfit to drive. Simply owning the car is usually not enough after this ruling.
Does it matter that the driver did not buy the counter coverage?
It can matter for whose insurance applies, but under O’Brien, it does not make the rental company liable. The court found no California law requiring the company to confirm the renter had insurance.
Is this ruling the final word?
It is a published Court of Appeal decision filed on October 29, 2026. A party can ask the California Supreme Court to review a decision like this, so the law in this area could still change.
When to Call Mines Law Firm
We handle auto accident injury claims, and are accepting clients for those. If you are injured in an auto accident, that is when you should call us at 888-700-0093.
ATTORNEY ADVERTISING. This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Every case depends on its own facts, and prior results do not guarantee a similar outcome. Responsible attorney: Jasmine Mines (State Bar No. 331135), Mines Law Firm, 468 N. Camden Drive, Suite 200, Beverly Hills, CA 90210.