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Car Rental Insurance Policy Information

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 car rental insurance you need.

Below, you'll find out why insurance is so important for your operation and what type of coverage you need to ensure your business is well protected.

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.

Below are some answers to commonly asked car dealership insurance questions:

• What Is Car Rental Business Insurance?
• How Much Does Car Rental Business Insurance Cost?
• Why Do Car Rental Operations Need Insurance?
• What Type Of Insurance Do Car Rental Businesses' Need?
• What Does Car Rental Insurance Cover & Pay For?

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, 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 car rental insurance policy that will cover all risks is essential.

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.

What Does Car Rental Insurance Cover & Pay For?

Car rental companies can be sued for a variety of reasons, including:

Negligence: If a rental company fails to properly maintain their vehicles or fails to adequately inspect and repair them before renting them out, they may be sued for negligence if a renter is injured as a result. If a car rental company is sued for negligence, their insurance policy may cover the costs of hiring a lawyer and paying any damages awarded to the plaintiff.

Vicarious liability: Car rental companies can also be held liable for the actions of their renters. If a renter causes an accident while driving a rental car, the rental company may be sued for any damages or injuries resulting from the accident. If a rental company is sued for the actions of a renter, their insurance policy may cover the costs of defending against the lawsuit and paying any damages awarded.

Discrimination: Car rental companies can be sued for discrimination if they refuse to rent a car to someone based on their race, gender, or other protected characteristic. If a car rental company is sued for discrimination, their insurance policy may cover the costs of defending against the lawsuit and paying any damages awarded.

Fraud: If a car rental company engages in deceptive or fraudulent practices, such as charging hidden fees or misrepresenting the condition of a rental car, they may be sued for fraud. If a car rental company is sued for fraud, their insurance policy may cover the costs of defending against the lawsuit and paying any damages awarded.

In all of these cases, the amount of coverage provided by insurance will depend on the specific terms and conditions of the policy. It is important for car rental companies to carefully review their insurance policies to understand what is covered and what is not, and to make sure they have adequate coverage to protect against potential lawsuits.

Commercial Insurance And Business Industry Classification

• SIC CODE: 7514 Passenger Car Rental, 7515 Passenger Car Leasing
• NAICS CODE: 532111 Passenger Car Rental, 532112 Passenger Car Leasing
• Suggested Workers Compensation Code(s): 8385 Automobile - Rental Co. - Garage Employees, 8002 Automobile - Rental Co. - All Other Employees & Counter Personnel, Drivers, 8380 Automobile - Service or Repair Center & Drivers

Description for 7514: Passenger Car Rental

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 751: Automotive Rental And Leasing, Without Drivers

7514 Passenger Car Rental: Establishments primarily engaged in short-term rental of passenger cars without drivers.

• Automobile rental, without drivers
• Hearse rental, without drivers
• Limousine rental, without drivers
• Passenger car rental, without drivers

Description for 7515: Passenger Car Leasing

Division I: Services | Major Group 75: Automotive Repair, Services, And Parking | Industry Group 751: Automotive Rental And Leasing, Without Drivers

7515 Passenger Car Leasing: Establishments primarily engaged in extended-term leasing of passenger cars without drivers. Establishments primarily engaged in finance leasing of automobiles are classified in Finance, Industry 6159.

• Automobile leasing, except finance leasing: without drivers
• Passenger car leasing, except finance leasing: without drivers

Car Rental Insurance - The Bottom Line

To find out more about the exact types of 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.

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 Garage
• Auto Glass Repair Shops
• Auto Paint Shops
• 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

The auto service and repair industry is an essential part of the transportation sector, responsible for maintaining and repairing vehicles to keep them running smoothly and safely. However, this industry also comes with inherent risks and liabilities, which is why commercial insurance is necessary to protect both the business and its employees.

First and foremost, the auto service and repair industry deals with hazardous materials and equipment on a daily basis. There is a risk of accidents and injuries occurring in the workshop, and insurance can provide financial protection in the event of a workplace accident or injury.

Additionally, the auto service and repair industry is subject to the risk of property damage. There is a potential for damage to vehicles in the workshop, as well as damage to the business' own property, such as tools and equipment. Business insurance can cover the costs of repair or replacement in the event of such damage.

Furthermore, the auto service and repair industry is vulnerable to liability claims from customers. If a customer's vehicle is not repaired properly, it can result in further damage or accidents on the road, leading to liability claims against the business. Insurance can provide coverage for these types of claims, protecting the business from financial loss.

In conclusion, the auto service and repair industry needs commercial insurance to protect against the risks and liabilities inherent in this line of work. Without insurance, businesses in this industry would be vulnerable to financial loss and legal action, which could ultimately lead to their failure.

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.