Does Commercial Insurance Cover Rental Cars? What You Need to Know

Operating a business often requires the use of vehicles, and it’s common for companies to need to use rental cars for a variety of purposes. Although your company faces risks anytime an employee uses a vehicle in the course of performing his or her work duties, having auto insurance can minimize potential financial losses if an accident occurs. Commercial auto insurance can include coverage for rental cars, but you’ll need to explore your specific company policy to find out what it covers.

Check for Hired & Non-Owned Auto Insurance Coverage

Most people’s personal auto insurance has coverage for rental cars. Commercial auto insurance is designed to provide coverage to fleets of vehicles employees use on a regular basis and that the business owns. However, you can include additional coverage on commercial policies for hired, borrowed, rented and leased vehicles. Although some commercial policies include this automatically, you’ll want to double-check that rentals are covered by your specific policy. When in doubt, it’s always best to refer your concerns to an auto insurance agent who can answer your questions and make sure you have the right type of coverage.

Get to Know the Specifics of Your Policy

Hired auto insurance coverage typically covers traditional liability costs your company could incur if an employee has an accident. Comprehensive coverage also includes compensation for damages that can occur to a rental car in the event of theft, vandalism, fires, or other covered perils. Collision coverage covers damages from collisions with other vehicles or objects, and you’ll find coverage amounts can vary from one type of policy to another. If your business uses rental cars regularly, it’s best to work with your insurance agent to make sure you have every possible scenario covered in the right amounts.

Ask Employees to Take Photos or Videos of Rental Vehicles

Rental car companies can vary according to how seriously they take minor scratches, and it’s possible for someone to overlook the damage that’s already on the vehicle before driving away. Asking your company’s employees to document the status of the cars before they take possession of the vehicles can protect your company from costly claims. Doing a walk-through with the rental car company is beneficial for documenting existing damage to avoid being falsely blamed for property damages.

Implement Background Checks for Drivers

The cost of commercial auto insurance can vary widely, but you can do your best to keep premiums low by carefully screening employees for poor driving histories. Doing background checks on drivers helps you identify potential risks that could cause your company to need to file a claim. Ideally, any person you put behind the wheel of a rental car should be someone your company would trust with the vehicles it owns. Implementing policies such as not allowing cell phone use while driving can further help your company prevent accidents in rental cars that could require filing a claim.

If you aren’t sure whether your policy covers renting cars, make sure to call your insurance agent so you don’t encounter any unwelcome surprises. For the highest-quality motorcycle, commercial, homeowners, and Car insurance, San Diego residents rely on the experienced team from Altra Insurance Services. Give one of our friendly agents a call today.