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What is Business Car Rental Insurance?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 24 February 2020
  • Copyright Protected:
    2003-2020
    Conjecture Corporation
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Business car rental insurance is insurance protection that aids in covering the costs associated with any damage to a vehicle that is rented for some type of business-related purpose. The idea behind this type of coverage is to insure that in the event of any accidents that result in damage to the vehicle, the costs of repair or replacement are covered in full. Many car rental companies offer this type of insurance coverage as an option of the rental agreement, although some credit card companies and personal insurance plans of the driver may also provide some degree of protection.

Buying short-term business car rental insurance from the rental agency can be an expensive option. While the scope of coverage is usually sufficient to manage expenses up to and including replacing a vehicle totaled in an accident or an extended period of medical care for anyone injured in the accident, the daily fees for the coverage can easily amount to anywhere from a third to half of the total charges for the rental period. For this reason, many business travelers will choose to decline the business car rental insurance offered by the rental agency, and rely on coverage from other sources.

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Some companies will choose to maintain their own business car rental insurance plans for employees who are authorized to travel on behalf of the business. This can actually be more cost-effective, since some insurers will extend group rates for the coverage. Assuming that business travel is a common task for those who are insured, the savings generated from this method can be significant when compared to acquiring the short-term coverage via a car rental agency.

Another approach has to do with business car rental insurance that may be included in the benefits associated with a corporate credit card account. In this scenario, all authorized users of the credit account have access to the coverage whenever they use the card to reserve and pay for car rentals during a business trip. Once again, the cost for this approach is often considerably less than going with the plans offered by rental agencies, saving the company a great deal of money.

One important point to consider before choosing business car rental insurance provided through a corporate credit card account or via a direct policy sold to the corporation is the amount of coverage that is provided. In some cases, the coverage is considerably less than the coverage provided by plans offered by the car rental agencies. In addition, the insurance provided through the credit card company may be limited by any number of provisions that are not present in the terms and conditions found in the coverage provided through the car rental agency. Before assuming that a given business car rental insurance plan is sufficient, read those terms and conditions and identify the limits and the scope of the coverage. Doing so makes it easier to make an informed choice in securing the coverage, and could possibly save a great deal of money in the event an accident does take place.

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