It will depend upon state laws if the rental car company can be held liable for the damages caused by a driver who rented from them and caused an accident while uninsured. Typically a person renting a car signs a rental agreement which places responsibility for damages caused in an accident on the renter.

Though many consumers believe that car rental companies will assume full responsibility for the cars they rent, in most states, car rental companies are not obligated to take responsibility for the actions of their rental drivers from the information we found. At one point 16 states—Arizona, California, Connecticut, Delaware, Florida, Idaho, Iowa, Maine, Michigan, Minnesota, Nevada, New York, Oklahoma, Pennsylvania, Rhode Island, and Wisconsin, plus the District of Columbia—allowed car rental companies can be held responsible for the negligent actions of rental car.

In March 2005, there was an amendment offered to a Federal House Transportation Bill to rescind this “vicarious” liability that state law in these 16 states and DC allowed. The House voted to accept this amendment, which would nullify state laws imposing vicarious liability to rental car companies if it becomes law.

If you were hit by an uninsured motorist driving a rental car, you should contact the rental car agency to see if they are going to take responsibility for the damages their renter caused. If they are not, then you may need to contact your state's insurance regulator or a lawyer to find out what state law requires rental car agencies to do in this type of situation.

Update:The Vicarious Liability legislation discussed here did pass in 2005 and was signed into law August 10, 2005.