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Car Rental Q&A: How Do I Refuse to Rent a Car to Someone and Not Get Sued?

A car rental operator wants to know if he doesn't feel comfortable renting a car to a customer, what can he do to not get sued by the customer?

by Zurich Insurance
March 15, 2016
2 min to read


Q: How do I refuse to rent a car to someone and not get sued for it?

— Bruno Vargas, Speed Auto Rental, Miami

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Answered by Bob Heller and Dennis Magnuson, Zurich Insurance:

From an insurance perspective, don’t rent to someone who doesn’t meet your qualifications, someone you know would be a violation of your minimum age requirements, and someone who is obviously intoxicated or impaired by drugs or alcohol.

If you are not comfortable with a prospective renter, you are not required to rent him or her a vehicle. However, you should never refuse to rent to someone based solely on their inclusion in a “suspect class” as defined by the U.S. Supreme Court.

The definition of “suspect class” currently includes race, religion, national origin, and alienage (McLaughlin v. Florida: race), but it’s subject to future expansion by the courts. If you discriminate on the basis of any of these categories, you may be subject to a lawsuit. As a result, if you refuse to rent to someone, you should always create an incident report with proper documentation as to why you refused to rent to that person.

At the end of the year, review the reports — that you created for the people to whom you refused to rent — and determine whether you see any trends. If there are trends you are not comfortable with because they appear to show discrimination, you should not use these reasons for refusal in your company guidelines. And you should take appropriate action to further train your counter employees to avoid even the appearance of discrimination.

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Additionally, if you rent to someone who is under the influence and he or she is involved in an accident with your rental vehicle, you might be brought into the case for negligent entrustment (Drummond v. Walker). Your counter procedures may indicate that you don’t rent to anyone who is under the influence of drugs or alcohol, but without doing a drug or alcohol test, there is no way to know if someone is over the legal limit.

In this situation, it is best to err on the side of caution. If you feel a potential customer should not be operating a motor vehicle, you should refuse to rent to that individual.

What's Your Question?

Email your car rental operation-related questions to Auto Rental News care of chris.brown@bobit.com.

Bob Heller is the senior vice president of rental and leasing programs at Zurich Insurance. Heller can be reached at bob.heller@zurichna.com. Dennis Magnuson, the claims attorney at Zurich, contributed to this response.

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