Smith Buckley and Hunt Insurance's Blog

Rental car agreements have evolved in the last few years. Just because your business may have hired car physical damage coverage doesn't necessarily mean you are fully covered in the event of damage to a rental car.

The big area of confusion has to do with "loss of use." Sure, if your business policy has hired car physical damage coverage, you should be covered for damages to the vehicle. The issue is "loss of use." So, if the vehicle is in the shop for a week or two, then you may be responsible for the loss of use of that vehicle to the rental company during that time. You may also be responsible for the fees and storage.

You also have to be congnizant of the "dimunition of value" of that vehicle. The vehicle is most certainly going to be worth less now after the accident. You could be responsible for this loss of value.

What to do? If you rent a lot, it probably makes sense to deal with one rental car company and review the contracts carefully. Try to negotiate if you can. Maybe the best way to completely cover yourself is to purchase the LDW/CDW from the rental agency.