Business Auto Insurance: Key Issues When Renting a Car
Navigating Business Auto Insurance and Rental Car Issues
When you’re running a business, transportation is often a key element. Whether you’re sending employees to meet clients or transporting goods, having the right business auto insurance is crucial.
But what happens when you need to rent a car for business purposes?
This can bring up several issues, especially if you’re not sure how your business auto insurance applies to rental cars. Let’s dive into the specifics of business auto insurance and renting cars, and why it’s important to verify your coverage with us at Huff Insurance.
What is Business Auto Insurance?
Business auto insurance, also known as commercial auto insurance, covers vehicles used for business purposes. This includes cars, trucks, vans, and other vehicles owned by your business. Coverage typically includes:
- Liability Coverage: Pays for damages you cause to others.
- Physical Damage Coverage: Covers repairs to your vehicle from accidents, theft, or other damages.
- Medical Payments: Covers medical expenses for you and your passengers.
- Uninsured/Underinsured Motorist Coverage: Protects you if the other driver is at fault and doesn’t have enough insurance.
Understanding Rating Symbols for Business Auto Insurance
Business auto insurance policies use specific rating symbols to define the coverage provided for different vehicles. These symbols are crucial when it comes to renting a car, as they determine whether your rented vehicle is covered under your existing policy.
Each type of coverage on your policy (liability, physical damage, etc.) can use different symbols, but it’s important to note that very few companies offer Symbols 1 for physical damage coverage.
Here’s a breakdown of each symbol and how they affect your coverage:.
Symbol 1 – Any Auto:
This symbol provides the broadest coverage. It means your policy covers any auto, including owned, leased, hired, rented, or borrowed vehicles. If your policy includes Symbol 1, you’re likely covered for liability when renting a car for business. However, very few companies offer Symbol 1 for physical damage coverage. So you may need to purchase the loss damage waiver from the rental car company.
Symbol 2 – Owned Autos Only:
Coverage applies only to vehicles owned by the business. This does not extend to rental cars. If you have this symbol, you may need to purchase additional rental car insurance.
Symbol 3 – Owned Private Passenger Autos Only:
This covers only private passenger vehicles owned by your business. It does not cover trucks, buses, or other types of vehicles, nor does it extend to rental cars.
Symbol 4 – Owned Autos Other Than Private Passenger Autos Only:
This symbol covers all owned vehicles that are not private passenger vehicles, such as trucks and buses. Rental cars are not included under this symbol.
Symbol 5 – Owned Autos Subject to No-Fault:
This symbol applies to owned autos required to have no-fault benefits in a state where no-fault insurance is mandatory.
Symbol 6 – Owned Autos Subject to a Compulsory Uninsured Motorist Law:
This symbol covers owned autos required to have uninsured motorist coverage in a state where such coverage is mandatory.
Symbol 7 – Specifically Described Autos:
This symbol applies only to the vehicles specifically listed on your policy. If your policy includes Symbol 7, only those vehicles explicitly described in the policy are covered. This does not extend to rental cars unless they are listed on the policy, which is typically not the case.
Symbol 8 – Hired Autos Only:
This symbol covers vehicles you lease, hire, rent, or borrow. If your policy includes Symbol 8, rental cars would be covered, making it ideal for businesses that frequently rent vehicles. Again, double check your policy to make sure that your liability AND your physical damage coverages have symbol 8.
Symbol 9 – Non-Owned Autos Only:
This covers vehicles you do not own, including employee-owned vehicles used for business purposes. However, this does not typically extend to rental cars unless specified by the policy.
Symbol 19 – Mobile Equipment Subject to Compulsory or Financial Responsibility or Other Motor Vehicle Insurance Law Only:
This symbol covers mobile equipment (like forklifts) that must be registered and are subject to compulsory insurance laws.
Renting a Car for Business: What You Need to Know
When renting a car for business, it’s essential to understand how your existing business auto insurance applies. Here are common issues you might face:
1. Liability Coverage:
Many assume their personal auto insurance will cover rental cars, but business rentals are a different story. Your business auto insurance should extend liability coverage to a rental car. This ensures that if an accident occurs, you’re covered for damages or injuries to others.
2. Physical Damage Coverage:
Physical damage coverage for a rental car is another critical consideration. Without it, you might be responsible for costly repairs or replacement if the rental car is damaged or stolen. Your commercial auto insurance policy can sometimes extend this coverage, but it’s not guaranteed.
One thing to keep in mind is that in order to add the physical damage coverage for rented vehicles, we need to have the annual rental expenditures and the max value of a vehicle that you will rent.
3. Rental Car Insurance from the Rental Company:
Rental companies offer additional insurance options, such as collision damage waivers (CDW) and liability coverage. While these can provide extra peace of mind, they will cost you extra money for the rental. Before purchasing, check if your business auto insurance already covers these areas. There are times when the rental car company insurance will be the best option for you. Check our research page we have that talks about the rental company insurance.
Why Verify Your Coverage with Huff Insurance?
Before renting a car for your business, it’s crucial to verify your coverage with Huff Insurance. Here’s why:
- Avoid Gaps in Coverage: Ensuring your business auto insurance extends to rental cars can prevent unexpected out-of-pocket expenses.
- Peace of Mind: Knowing you’re covered allows you to focus on your business without worrying about potential liabilities.
- Customized Advice: Our experienced team can review your policy and suggest necessary adjustments to ensure comprehensive coverage.
Steps to Verify Your Coverage
To ensure you’re properly covered when renting a car for business, follow these steps:
- Review Your Policy: Look at your current business auto insurance policy to see if rental cars are covered.
- Contact Huff Insurance: Give us a call to discuss your coverage needs. We can clarify whether your existing policy extends to rental cars.
- Adjust Your Policy if Needed: If your current policy doesn’t offer sufficient coverage, we can help you adjust it or add endorsements to meet your needs.
Conclusion
Renting a car for business purposes involves more than just picking up the keys. Ensuring you have the right commercial auto insurance coverage can save you from potential financial headaches.
At Huff Insurance, we’re here to help you navigate these complexities and ensure your business remains protected. And if you have any doubt, or if getting the right coverage on your policy is not possible, then go ahead and buy the coverage from the rental car company.
Give us a call at 410-647-1111 to verify your commercial auto insurance and extend liability and physical damage coverage to your rental car.
