Insurance Requirements for Rental Car Business

If you run a car rental business, turning down calls from insurance agents may not be a new thing for you. But have you ever contemplated what happens if some tiny bolt in one of your precious cars goes wrong? Even the most acclaimed car drivers can make a mistake!

We are not here to scare you! Rather, we want to reassure the vitality of taking car rental business insurance for your business concern.

The market is flooded with various insurance plans, so find a holistic commercial coverage that puts your business needs first. Since most car rental business needs an efficient carrier that could understand your specific needs, find a licensed and reputable insurer. Depending upon your business parameters and requirements, you can choose the best plan that fits your car rental enterprise. Once you conclude this step, analyze the cost of each of the coverage plans and find the most affordable one. Make sure that you are keeping constant communication with your agent to get the best deal.

 

Tips for selecting an Insurance Provider for your Car Rental Business

  • Inventory evaluation

 

Before proceeding, you need to provide a list of vehicles that require insurance. At the very least, you need to include an estimate of how many automobiles you anticipate buying in a given year. Thus, the cost of your insurance is determined by the size of your fleet.

 

  • Get customized car rental business insurance policies

 

Even a car rental business entity hinges on the utility purpose of the vehicle. For instance, the car’s insurance used for camping is different from that of a vehicle used in urban sites. Depending on the type of car fleet you own and the location of your business, you must choose the insurance scheme.

 

  • Difference between General Business insurance and Fleet Insurance

 

This business insurance is different from fleet insurance. It wraps on-site liability, workers, constructions, and general accountabilities. However, fleet insurance is a specific type of car rental business insurance covering individual vehicles in the fleet.

 

 Benefits of getting Car Rental Business Insurance

 

  1. Safeguards your business from unforeseen mishaps

 

The car rental industry is highly prone to unpredictable losses where the owned vehicles meet with accidents frequently. As you rent out your car to a stranger, the chances of huge business losses exist if you do not have a proper safeguard in the form of car rental business insurance.

 

  1. Car rental business insurance can help in tax optimization

 

The premium you pay on the plans for car rental business insurance is a tax-deductible expenditure. You can use it to optimize your overall business tax liability.

 

  1. Offers added assurance about the security of your assets

 

As a business owner, your business assets are comparable to your children. The ability to secure your car rental business assets, particularly your cars, gives you an added peace of mind for focusing on your core operations.

 

Insurance Covers Car Rental Businesses should have

Before starting the business, you need to prioritize your business safety. These are the general insurance coverages that you can customize depending on your needs.

 General liability insurance 

Also known as general commercial liability insurance (or CGL), this is a business imperative insurance that protects your car rental business from general claims like property damage or bodily injury. It covers medical expenses, attorney fees, personal and advertising inquiries, claims from product damage, and third-party product damage that your company is responsible for incurring in case of unfortunate events. Lack of this insurance may leave you financially vulnerable to any lawsuits or damages. The average spends of a car rental company in the US is $450-$1,000 per year for $1 million of CGL coverage.

Commercial Property Insurance 

Commercial property resonates with all the tangible property entitled to your business. This type of car rental business insurance provides coverage for direct physical loss or damage to property. Since you run a rental car business, it is necessary to protect your assets from irreversible damage. This coverage enables you to repair or replace damaged properties. However, rental cars are not included in this insurance, but your private parking lot or office space is entirely covered.

Business interruption Insurance

This insurance covers operating expenses incurred by physical calamities or natural disasters. Even though it is not sold separately, it complements your property or casualty policy. If disasters halt your business, you can also apply for location shifts, payroll, taxes, and loan payments. However, this type of car rental business insurance got subjected to constant scrutiny in the present COVID-19 scenario. As there were almost no physical property damages, the fact that insurance is not covering the pandemic troubles has triggered.

Worker’s Compensation Insurance

Worker’s compensation insurance is commonly known as worker’s comp insurance. It covers worker’s medical expenses, lost wages, rehabilitation costs, and even death benefits. This insurance is essential for the car rental business insurance considering the menaces involved in the car industry.

CDC claims that motor vehicles crash is the leading cause for work-related deaths in the USA. It is the main reason why most states need car rental companies with Worker’s Comp Insurance.

Excess liability insurance

This type of car rental business insurance provides limits to exceeding liability policies. In case of severe damages, your existing coverage may get exhausted. This fact is where this policy kicks in! Similar to insurance for your insurance, it allows you higher limits on the top of the original policy.

Commercial Auto Insurance

This insurance helps you to secure all the rental vehicles, including the ones you own and rented. Usually, rental cars will have a fair value due to their high mileage and brand new qualities. Hence, you need to make sure that your car rental business insurance conceals or exceeds its present market value. It provides coverage for bodily injury liability, property damage liability, CSL, medical payments, collision, uninsured motorists, and comprehensive physical damage.

Commercial Umbrella Insurance

Commercial Umbrella insurance is similar to excess liability insurance but varies in the number of liabilities it covers. Unlike the latter, the former provides extra support for more than one liability insurance policy. This car rental business insurance backs you with medical costs, legal expenses, damages from the third-party property, judgments, and settlements. The commercial umbrella stretches the limit of coverages like the General Liability Insurance and Commercial Auto Insurance. It is also vital to note that this insurance does not cover certain claims like Commercial Property Insurance. Nationwide stated that this type of insurance is not provided as stand-alone coverage. Instead, it is considered supplementary to other liability coverages.

Secure your business from unwanted risks with good car rental business insurance!

Many schemes of car rental businesses insurance are available to protect your car hiring company. Even though insurance is not compulsory, running a business without one is extremely risky. Get your car rental business insured today!

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