Arizona Car Rental Insurance Policy Information
Arizona Car Rental Insurance. No matter the industry, if you're a business owner, having the right insurance coverage is vital to protect your operation from the unexpected.
When you own a business in an industry that's exposed to higher risks, such as a car rental company, investing in a comprehensive insurance coverage is even more crucial - and often, trying to determine what type of coverage you need is more complex.
Automobile rental operations may offer both short- and long-term rental and leasing of automobiles, recreational vehicles, small trucks, or trailers. Some offer vehicles or trailers, packing materials, dollies, and other lifting devices for customers to transport their own personal property.
Many rental companies have vehicle refueling and repair on premises, while others will contract these functions to others. Some rental car operations are housed in stand-alone facilities; others are housed near transportation hubs such as airports.
Services that may be offered include delivery of the rented vehicle to the customer or the pickup and transport of the customer to the rental facility.
Some rental agencies sell the vehicles that have reached a set mileage or usage to the general public while others sell to used car dealers or auto auctions.
If you're planning on establishing an auto renting business, you may be wondering what type of Arizona car rental insurance you need.
Below, you'll find out why insurance is so important for your AZ operation and what type of coverage you need to ensure your business is well protected.
Arizona car rental insurance protects your auto renting business from lawsuits with rates as low as $87/mo. Get a fast quote and your certificate of insurance now.
Why Do Car Rental Operations Need Insurance?
Owners and operators of car rental companies face many of the same risks that business owners in all industries face; accidents, injuries, property damages, natural disasters, and lawsuits, for example.
In addition to these risks, AZ car rental business owners also face many risks that are unique to their industry, such as damage to their fleet of vehicles, cyberattacks, and marketing errors.
In order for auto rental business owners and operators to properly protect their operation, their clients, their employees - and themselves - investing in comprehensive Arizona car rental insurance policy that will cover all risks is essential.
What Type Of Insurance Do Car Rental Businesses' Need?
The specific type of Arizona car rental insurance coverage car rental business owners and operators need depend on several factors; where their AZ rental operation is located and the size of their business, for example.
Since needs vary, speaking with a reputable agent who specializes in Arizona car rental insurance and has experience assisting auto rental businesses is highly recommended.
Below, you'll find a few examples of some of the different types of insurance policies that business owners in this industry will likely need to carry.
- Commercial general liability: All business owners need general liability coverage, including car rental business owners and operators. This coverage protects you from third-party property damage and bodily injury claims. For example, if a customer were to slip and fall while they were on your property, the accident resulted in an injury, and the customer filed a lawsuit against you, your commercial general liability coverage would help to pay for your legal expenses, as well as any compensation that a court may find you liable for.
- Commercial Property: Another policy that all business owners need, commercial property insurance protects your business from damages caused by acts of nature, theft, or vandalism. For instance, if your rental facility were damaged in a storm, this coverage would help to pay for any losses. Do note, however, that generally, commercial property insurance usually doesn't cover the damage or loss of commercial vehicles – your rental cars.
- Commercial Fleet Insurance: In order to protect your rental vehicles, you'll need to invest in commercial fleet insurance. This specialized policy offers liability protection that will cover the cost of lawsuits, medical payments, and physical damages that may be associated with your fleet of vehicles and/or the customers who rent them from you. For instance, if one of your rental vehicles were damaged in an accident, this policy would help to pay for the damages. Commercial fleet insurance can also include uninsured or underinsured motorist coverage, roadside assistance, comprehensive coverage, personal accident coverage, and personal effects coverage.
- Workers' Compensation: In order to protect your employees, you'll need a workers' compensation policy. This insurance covers the medical care and lost wages that your employees may experience in the event that they are involved in a work-related accident.
- Business Interruption Insurance: Investing in business interruption coverage is also highly recommended. In the event that your car rental business has to shut down for a period of time – it was damaged in a storm or a fire and you need to close down shop until the repairs are made – this policy will reimburse you for any income you may lose while you are unable to operate.
There are several types of Arizona car rental insurance coverage that are needed. The specific type of coverage you'll require depends on a variety of factors; where your AZ car rental is located, the size of the car rental, and the risk for storm damage in your area, for example.
AZ Car Rental' Risks & Exposures
Commercial auto exposure is high due to the ongoing use of vehicles by renters, whose driving habits are unknown to the operation and who may not be familiar with driving conditions in the area where the vehicle is rented. The rental company should keep a copy of the renters' driver's license and proof of insurance.
The rental contract should identify all drivers and state that unlisted, unlicensed, or minor drivers are not permitted to operate the vehicle. It should also include a hold-harmless agreement in which renters agree to assume responsibility for the operation of the vehicle to limit the business's exposure to vicarious liability only. If a collision damage waiver is offered, the customer's signature is needed to document whether this was purchased or declined.
The customer should also be required to sign a vehicle pre-inspection form to minimize disputes when the vehicle is returned with damages. All employee drivers should have valid licenses and their MVRs regularly checked. Vehicles must be regularly maintained with records retained. If vehicles are furnished to employees, there should be written procedures for personal and permissive use.
Vehicles stored in open lots are particularly susceptible to damage by hail, wind, flood, vandalism, and theft. Lots should be well lighted with chains, fences or gates to prevent access and transport. An alarm system that reports directly to a central station or the police department should be used. Security guards may be appropriate in some areas.
Garagekeepers exposure is from damage that can occur to customers' vehicles left with the rental company while renting other vehicles. Keys to customers' vehicles should be kept in a locked box to prevent unauthorized use. Proper identification should be required to prevent handing a customer's car to the wrong owner.
Property exposure comes from office and garage operations. Electrical equipment and wiring should meet current codes and be well maintained. Flammables such as fuels, paints, lubricants, oils, degreasers, and solvents used in the refueling and repair operations must be properly labeled, separated, and stored away from combustibles. Spray painting should be done in spray booths with good ventilation, UL-approved wiring and fixtures, and adequate controls.
Any welding needs to be evaluated for proper handling of the tanks and gases. It should be done away from the other operations with either a separate room or flash/welding curtains. Smoking should be prohibited. Poor housekeeping is a serious fire hazard. Unless stored and disposed of properly, oily rags can spontaneously combust and cause a fire.
Vehicles are target items for thieves. Appropriate security controls must be taken including physical barriers such as chains, fences, or gates, lighting to deter access to the premises after hours, and an alarm system that reports directly to a central station or the police department.
Business income and extra expense exposures are high as replacement facilities may not be readily available.
Inland marine exposure comes from accounts receivables if the operation offers credit, computers to monitor rentals and vehicles, signs, and valuable papers and records for customers' information, vehicle titles, and maintenance records. Backup copies of all records, including computer records, should be made and stored off premises.
Crime exposures are from employee dishonesty and theft of money and securities. Background checks, including criminal history, should be performed on all employees handling money. Auto rental operations involve a number of transactions and accounts that can be manipulated.
There must be a separation of duties between persons handling deposits, billing, ordering, disbursements, and reconciling bank statements. Physical audits should be conducted at least annually. Theft of money and securities prevention requires controls of monies kept in the cash drawers and regular bank drops.
Premises liability exposureis high due to the number of visitors to the rental facilities. Customer waiting areas should be provided. Floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
Employees who transport customers must be screened and trained to interact appropriately. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
If the premises are open after dark, there should be adequate lighting and appropriate security for the area. There should be a disaster plan in place for unexpected emergencies. Vehicles in open lots can pose an attractive nuisance. Chains and fences should be in place to prevent entrance after hours.
Personal injury exposuresinclude allegations of discrimination, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises.
Product liability exposures are high if used vehicles are sold directly to the general public. Check-off procedures should be in place.
Environmental impairment exposures can be significant due to the storage of fuel in underground fuel tanks and the disposal of used oils, solvents and other hazardous wastes from service and repair operations. All tanks and pipes, underground or above, must meet state or federal regulations and be routinely tested for leakage.
Spillage and leaking of pollutants into the air, ground, or water can result in high cleanup costs and fines. Spill procedures must be in place to prevent the accidental discharge of sludge from water reclamation systems used in washing vehicles.
Contracts should be in place to dispose of all environmentally dangerous chemicals. If there are underground storage tanks, a UST policy will be needed.
Workers compensation exposure in the office is minimal. Employees performing maintenance or repair work should be properly trained. Employees working in the garage can incur injuries from slips, falls, back sprains, strains and hernias, hearing impairment from noise, and foreign objects in the eye. Eye and ear protection should be provided.
Welders may suffer burns. Repair areas should be properly ventilated. Hoists need to be regularly inspected to prevent vehicles from falling off. The proper use of lifting techniques and of dollies should be encouraged.
Refueling should be done only in well-ventilated areas to minimize inhaling of fumes. Information regarding chemicals should be available to employees along with early warning signs of problems. Pickup and delivery of customers or vehicles can result in injury due to vehicular accidents.
Arizona Car Rental Insurance - The Bottom Line
To find out more about the exact types of Arizona car rental insurance policies you'll need, how much coverage your operation needs - speak with an experienced insurance broker who understands the unique risks of auto renting.
Arizona Economic Data, Regulations And Limits On Commercial Insurance
Anyone who is thinking about starting a business knows that choosing the right location for their operations is essential. The right market and a demographic that will benefit from and be interested in purchasing the products and services a business offers is crucial for the success of an organization. If you're considering Arizona as the location for your company's headquarters or a new division of your business, it's imperative that you make sure the state offers a climate that will allow your operation to thrive.
By analyzing the employment rate and the key industries that are thriving in the state, you can determine if Arizona will be a suitable location for your business. It's also important to be aware of the forms of commercial insurance coverage business owners are required to carry. Below, we look at all three areas to help you decide if the Grand Canyon State is the right place for you to establish a business.
Economic Trends for Business Owners In Arizona
The unemployment rate in Arizona is higher than the national average; as of May, 2020, the rate was 4.9 percent, while the national average as 3.6 percent. However, compared to 2009, when the rate was 10.9 percent, there has certainly been a decrease in the rate of unemployment.
Urban areas are the ideal locations for businesses in the Grand Canyon State, such as Phoenix, Tempe, Scottsdale, and Chandler; but, smaller areas offer promise, too. Payson, Snowflake, Flowing Wells, and Cottonwood are just some of the smaller locations that are seeing economic growth in Arizona.
There are several key industries that are thriving within the state, including:
- Aerospace and defense
- Bioscience and health care
- Film and digital media productions
- Professional and business services
- Technology and innovation
- Trade, transportation, and utilities
Commercial Insurance Regulations In AZ
The Arizona Department of Insurance regulates insurance in Arizona. Commercial insurance is vital for a business, as it protects the interests of all who are involved with the organization; owners, employees, customers, and vendors. Like any other state, certain forms of commercial insurance are mandated in Arizona, meaning business owners are legally required to carry these policies.
All employers are required to carry workers' compensation insurance, as it provides coverage for work-related accidents and illnesses that employees sustain. Commercial liability insurance, which covers third-party personal injury and property damage liability claims, might also required for certain licenses.
For establishments that sell alcohol, liquor liability insurance is a legal requirement. Lastly, companies that rely on vehicles for business-related purposes (truckers, etc.) must carry a commercial auto insurance policy to protect the drivers of their commercial vehicles, as well as other drivers on the road.
Additional Resources For Auto Service & Repair Insurance
Read useful small business auto service and repair insurance policy information. In an aotu related business, you need to have the right type of commercial insurance coverage so that your garage, employees, and customers vehices & other property is protected.
- Auto Dealers
- Auto Detailing & Mobile Car Wash
- Auto Dismantlers
- Auto Service Repair
- Auto Supply Parts Store
- Car Rental
- Car Wash
- Gas Station
- Motorcycle Dealers
- Parking Lot
- RV Dealers
- Snowmobile Dealers
- Truck Rental
- Used Car Dealer
There is a Auto Service Risks Program is an enhancement of the Commercial Package Policy that is available to certain Auto Service Operations.
Automobile repair shops and garages offer a wide variety of mechanical services, from engine repair to tune-ups. The operation may be stand-alone or be part of another business such as an automobile dealership or filling station.
Gasoline stations are normally limited to the dispensing of gasoline, kerosene, diesel or fuel oil with incidental sales of auto accessories and pre-packaged snack food items. Larger gasoline stations may offer other services, such as auto repair, retail sales of food or auto parts, snack bar or restaurant, propane tank exchange, towing, or baths and overnight lodging facilities for truckers.
Car washes provide facilities for cleaning automobiles and other motor vehicles. Some are drive-through with either partially or fully automated conveyance of the vehicle throughout the operation. Hand washing, waxing, or interior cleaning of the vehicle may be offered, with customers sent to a waiting area. Damage to the customers' vehicles is the primary exposure as machinery and washes can break antennas, pull off stripping, crack glass and damage tires.
The three basic types of risks that are contemplated by the Auto Service Risks Program include:
- Repair Shops - operations primarily engaged in auto repair. This includes shops that do body, fender, radiator, ignition service and paint work.
- Service Stations- operations primarily engaged in servicing autos. The sale and installation of auto accessories are a part of this category as long as major engine or bodywork is not performed. Car wash facilities are eligible.
- Storage garages and other parking places.
The following classifications are specifically listed as eligible: Automobile:
- Quick Lubrication Services
- Repair or Service Shops
- Repair Shops–Self Service
- Car Washes–self-service and full-service
- Convenience Food/Gasoline Stores–self-service, full-service and combined
- Gasoline Stations–self-service, full-service and combined
- Parking–public-open air and not open air
Automobile, motor home, mobile home, trailer, and motorcycle dealers are NOT eligible for this program.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Signs, Valuable Papers and Records, General Liability, Employee Benefits, Environmental Impairment, Underground Storage Tank Liability, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Computer Fraud, Forgery, Goods in Transit, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage, Garagekeepers and Stop Gap Liability.
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