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Beware the Rental Car Minefield

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Rental car advertisers give the impression that the consumer is in control. Choose your own car! Grab that easy upgrade! Just drop it and run for your flight – we’ll email your invoice later!

But when it comes to your responsibility for loss or damage to or from the short-term rental, that control often gets lost in the fine print of the agreement. For example, when you rent a car for business purposes, do you know:

  • What other persons are permitted to drive the car? Spouse? Fellow employees? That hotel or restaurant valet parking attendant?
  • How much difference it makes that, even when you rent a car for 100% business use, the typical rental car agreement will be in your personal name, rather than that of the business?
  • If the rental car is damaged, exactly what are you responsible for? Direct damages? Loss of use? Diminution of value? Full replacement?
  • If you injure others with the car, what liability protection will the rental company provide you? Minimum limits required by law? Nothing? Varies by type of accident?

The answers to these and other coverage questions can vary widely among rental car companies and the states where the rentals take place. Depending upon exactly what you are responsible for under state law and the rental agreement, your current business auto insurance coverage may or may not step in to fill any gaps. And will those benefits touted by various business credit cards come to the rescue, or should you give up on all the analysis and just purchase the loss damage waiver offered by the rental car company?

The best time to determine your business rental car responsibilities is prior to renting the car. Whether the best protection for your business involves insurance, credit cards, waivers or simply switching your business to a rental firm with a better contract, now is the time to discuss your rental needs with your insurance advisor.

©2013 Selective Ins. Group, Inc. (Branchville, NJ). "Selective" insurers include Selective Ins. Co. of America, Selective Ins. Co. of New England, Selective Ins. Co. of N.Y., Selective Ins. Co. of South Carolina, Selective Ins. Co. of the Southeast, Selective Way Ins. Co., Selective Cas. Ins. Co, Selective Fire and Cas. Ins. Co and Selective Auto Ins. Co. of N.J. Insurers and products available vary by jurisdiction.