When Are Car Rental Companies Liable In A Car Accident Claim? – Car rental company insurance is an important investment for a car rental company because it protects the costs of the business owner.
This article will explain the basic insurance coverage for a car rental company, as well as general insurance and other policies that are relevant to the industry.
When Are Car Rental Companies Liable In A Car Accident Claim?
Every firm, regardless of sector, has risks that need to be insured. General liability insurance is the most common and comprehensive form of insurance purchased by business owners.
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Although general liability insurance is not legally required for companies, it is very dangerous to operate without it. If your company is sued, you could face millions of dollars (or more) in costs. The only way to prevent this type of disaster from destroying your organization is to have adequate general liability insurance to cover this damage.
Example 1: One of your customers fell on the ice in the parking lot while walking to the rental car. As a result of the incident, many people were injured, some of them required medical attention. The cost of treating the damage will be covered by general insurance.
Example 2: Executives at your company compare your company to another car rental company on social media. The comparison is bad and unfair to your opponents. They respond by suing for defamation, which is covered by general liability insurance.
Example 3: Your car rental company places an ad in the local newspaper at a price it does not offer. Customers who file class action lawsuits against your firm for false advertising, and the legal costs and settlements are high. This issue will be covered by general liability insurance.
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Of course, this is not a complete list of risks covered by a standard insurance policy, and some conditions may mean that some risks are not covered. To minimize potential coverage, it’s always a good idea to talk to your agent about the terms of your policy.
A car rental company in America costs between $450 and $1,000 per year to cover a $1 million loan.
You may be able to get general liability insurance for less if you purchase it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a comprehensive option that covers several types of coverage, such as business interruption insurance and property insurance.
While general liability insurance is the most important, there are different types of insurance to be aware of. Some forms of insurance that all car rental companies must have are:
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If your car business has its own office space and/or parking, it is worth purchasing commercial premises insurance to cover these items. This insurance covers buildings, other structures and other equipment (usually excluding rental cars).
Commercial auto insurance covers commercial vehicles such as rental cars. This coverage is required for each vehicle owned and leased by your rental car company
Leased cars have good resale value because they are new and have low mileage. Make sure your company’s rental car insurance limits match or exceed the market value of your fleet.
Because they employ people, many car rental firms require workers’ compensation insurance. Most states require workers’ compensation insurance for firms that have employees. Insurance provides protection against industrial injuries and occupational diseases.
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In addition to the insurance listed above, your car rental company may require other forms of coverage depending on the circumstances of your transaction. Some of these may not apply to you, so be sure to ask your agent if this policy is right for your company.
If you want to protect your car rental company with additional liability coverage, you may want to consider purchasing umbrella insurance. This insurance provides a certain level of liability protection, with limits usually set in the millions of dollars.
While it’s easy (and necessary) to invest in company insurance, it shouldn’t be your first line of defense. Yes, insurance will compensate your company for financial losses caused by an event, but it’s better to prevent losses altogether.
Use legally binding contracts and other business agreements. (We offer free templates for many commonly used legal forms.)
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To protect your assets, set up a limited liability company (LLC) or partnership. (See our step-by-step guide to learn how to register an LLC or company in your state.)
Optimize your company’s internal processes. This eliminates unnecessary errors in routine operations and creates a secure, stable business environment. No matter how often I travel for business, there is always something new to learn. Since I travel for a living, I am often asked to share these experiences with my fellow travelers. One of the topics I get asked about is car rental tips and what insurance to get.
Some people don’t know that there are different types of coverage and that their credit card may come with what they need. Additionally, business travelers can add hundreds of dollars to their rental costs without knowing or being unclear that they may be covered. Here’s a guide on what to look for when renting a car for business trips.
It is important for travelers to understand that there are four main types of rental car insurance. If you don’t have primary car insurance, you should consider investing in term insurance. Since you are traveling for business, check with your employer to see if they have company insurance.
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Civil servants, military and postal workers are often covered while on business trips. However, check with the owners to make sure. Also, some of the best travel credit cards 2019 may be blocked for you.
You may find that your personal or credit card insurance is sufficient to cover any business trip expenses if you pay for the expenses with a valid credit card. If you don’t have one, tell your employer.
Collision Damage Waiver (CDW) is an insurance waiver whereby the rental company waives some or all of the costs if the rental is damaged or stolen. However, if the car has been damaged due to careless driving, being driven by a non-contractor or for other reasons, the CDW will be void. This coverage is also known as Loss Waiver (LDW) or Physical Damage Waiver (PDW).
You may already have this coverage with your primary auto insurance or credit card. However, there may be a deductible and there is no guarantee that all costs will be covered. Also, your credit card may only come with a second tier, which means claims will first go to your insurance provider, who will determine what they will pay.
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From there, the credit card you used to pay the rent can help cover the difference. If you don’t have a primary insurance provider, your credit card can be your primary provider, although there may be limitations. I recommend checking with your primary auto insurance provider and credit card provider to get the most out of your insurance.
Supplemental Liability Protection (SLP) is coverage for damage to other people’s vehicles or property, and for any medical expenses for those involved in an accident you cause. Note that all US states require this insurance. Unless you have a rare car, you should be insured. However, if you rent a car abroad, you can purchase this cover.
Personal effects cover (PEC) covers the theft of items from the car you hire, up to a certain amount. Most people will not need to purchase this insurance as their personal insurance will likely cover most travelers. However, if you are traveling with luxury items, you may want to consider your options.
Personal accident insurance (PAI) covers the driver and passengers of the rental car in the event of an accident. Medical care (including ambulance) and death benefits are usually covered. You do not need to purchase this insurance as your health or life insurance will cover it. However, if you’re traveling abroad, having emergency travel insurance for such events can be a valuable investment.
Who Is Liable For An Accident Involving A Rental Car?
If you are under 25, you may have to pay more. However, you can negotiate to forego the extra income because you are going to work.
If you travel abroad, your protection may not be valid. You may also need an international driver’s license. Plan ahead.
If you’re traveling with more than one person, keep costs low by designating one person as the official driver. Also, to save money, fill the tank yourself before returning the car. Otherwise, you could end up paying twice for gas.
Also, if possible, ask how they charge toll roads. Be prepared to pay cash to avoid problems. Also keep in mind that any optional extras such as radio or other Bluetooth capabilities may cost extra.
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Finally, consider renting a car outside of the airport. As good as it gets
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