Businesses that use vehicles for work face a lot of risks. Whether your company owns a fleet or uses personal vehicles, it's important to have the right kind of insurance. Luckily, commercial auto insurance can extend to a variety of vehicles, including rental cars. If you're an individual using a rental vehicle for personal purposes, your personal auto insurance should be more than enough to cover any accident that occurs with the rented vehicle.
That said, if your company rents vehicles, you are at risk of owing the rental company for damages caused by your drivers. Insurance for a rented vehicle for work purposes is also known as "Hired and Non-Owned Auto Insurance." Hired auto covers leased, rented, borrowed and hired vehicles and comes as an addition to a commercial auto insurance policy.
What Auto Insurance Can You Have for Rented Vehicles?
Hired auto coverage typically covers bodily injury liability and property damage liability. This covers medical expenses and possible legal fees if the driver causes bodily injury or property damage while operating the hired vehicle. You can also choose to add:
- Comprehensive Coverage: Comprehensive coverage provides compensation if the rented vehicle is damaged due to fire, theft, vandalism and other incidents not involving collision.
- Collision Coverage: Collision coverage provides compensation if the rented vehicle is damaged due to a collision with another vehicle or object.
What If Employees Rent Cars For Work?
This is where there is a bit of gray area. If an employee rents a vehicle for business under their name and gets into a wreck, the vehicle may be covered. Since it's beneath the employee's name, the vehicle is considered a non-owned vehicle. Some insurance companies may not cover the accident for employees, however.
If you need additional coverage for employees, you can also purchase Employee-Hired Auto Insurance. This guarantees that employees of your company are insured while driving a hired or rented vehicle.
How Much Does Hired And Non-Owned Auto Insurance Cost?
Since this coverage comes as an addition to a larger commercial auto insurance policy, the premium varies depending on the cost of renting the vehicles, your location and the number of employees that will be using the vehicles. Be careful about checking the driving records of your employees, as they may affect the cost of your commercial auto insurance overall. Other factors that influence the cost include your credit history and claims history.
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