Car Rental Business Insurance: What You Need, How to Get It

Car rental business insurance protects your business and fleet of vehicles.

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Updated Jan 3, 2023 · 3 min read

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Car rental businesses can have unique and often complex insurance needs. To protect your operations, you’ll probably need multiple types of business insurance, including commercial fleet insurance for your vehicles.

Not all business insurance companies offer commercial fleet insurance. The simplest choice may be a carrier that offers this coverage and every other policy you need. But to find the best possible fit, get multiple quotes and evaluate them based on the specifics of your car rental business, like:

How many cars you have.
What kind of cars they are.
How much your cars are worth.
Whether you own standard cars or other types of vehicles.

What kind of insurance do car rental businesses need?

Car rental businesses typically need at least insurance for their vehicles in line with what each state requires. However, as with all businesses, additional types of business insurance coverage may be needed based on your individual operation. Here are some policies that may be necessary.

Commercial fleet insurance

Commercial fleet insurance covers your cars and is designed to benefit businesses with multiple commercial vehicles. It protects you, your employees and your vehicles from damages or claims that result from a vehicle’s use.

If your car rental business is small, commercial auto insurance may work instead. However, these policies can require steps that fleet insurance won’t — like rating individual vehicles and getting employee names on the policy.

General liability insurance

All businesses should have general liability insurance. This insurance policy can protect your business from third-party claims of bodily injury, property damage or advertising injuries. Overall, general liability insurance should cover your car rental business if a third party is injured in an accident involving one of your rental cars.

Excess liability insurance

Excess liability insurance sits on top of a general liability policy, increasing coverage limits in the case that you surpass the amount on a regular policy. With a car rental business, which generally poses more risk than other businesses, excess liability insurance might be useful to have.

Commercial property insurance

Commercial property insurance covers damage, loss or theft of any other property or equipment your business owns. It likely won’t cover commercial vehicles, but you may still want this protection for other physical assets your car rental business has, like the lot or garage where the vehicles are stored or office equipment.

Workers' compensation insurance

If you have employees, you’re required by law in most states to have workers' compensation insurance. Workers’ comp will cover your employees if they’re injured on the job, paying medical expenses and a portion of their salary while they’re out of work.

» MORE: How to get business insurance in 4 steps

Where to get car rental business insurance

Most business insurance companies offer basic policies like liability insurance. Commercial fleet insurance is less common, though. If you can find a provider with all the coverage you need, that company may be the simplest and most efficient solution. Start with these options:

Nationwide

4.5

NerdWallet rating

Nationwide offers comprehensive commercial fleet coverage and other specialty auto insurance. You can buy many additional business policies from Nationwide, including general liability insurance and commercial property insurance, either separately or as part of a broader business owner’s policy, or BOP. Nationwide offers online quotes, but you can purchase coverage from an agent only. Read NerdWallet's review of Nationwide business insurance.

Allstate

4.5

NerdWallet rating

Allstate sells business auto and fleet coverage. It may be a good fit for car rental businesses that need a BOP. Allstate’s BOP combines general liability insurance and property insurance — you can add other coverage as well — although you can’t purchase policies separately. While you can buy Allstate business insurance online, business auto policies aren’t available in every state. Read NerdWallet's review of Allstate business insurance.

Due to the specialized nature of commercial fleet vehicle insurance, you may also want to consider hiring a business insurance agent near you who's worked with other car rental businesses. Talk to other business owners or contact the local chamber of commerce for potential agent and broker recommendations.

How to shop for car rental fleet insurance

NerdWallet recommends getting multiple business insurance quotes before deciding which policies to buy. Because commercial fleet vehicle policies aren’t all the same, car rental businesses should consider the following features in addition to price when evaluating coverage options:

Liability: On top of a general liability policy, your commercial fleet insurance should include liability coverage that protects third parties from any bodily injury or property damage caused by your vehicles.
Medical payments: Medical payments coverage will pay the medical bills and expenses of anyone injured in an accident while they were in one of your cars, regardless of who was at fault.
Physical damage: This coverage protects you in the case of loss or damage to the cars in your fleet specifically.
Collision damage: Collision damage is usually part of physical damage and mainly covers loss or damages to your cars when they are involved in a collision or rollover.
Comprehensive coverage: Comprehensive coverage is also typically included as physical damage coverage. Comprehensive coverage accounts for any events that aren't collisions or rollovers, such as theft, vandalism, fire and storms.
Uninsured and underinsured motorist coverage: This covers your cars and drivers if they’re involved in an accident with another driver who has little or no insurance coverage. This coverage also protects your business in the case of a hit-and-run, where you have no information on the other driver.
Roadside assistance: This coverage can include access to towing if one of your cars breaks down, as well as additional support in situations like a vehicle in your fleet getting a flat or an employee being locked out of the car.

Depending on your individual car rental business, you might also look for items like:

Rental coverage: If you need to rent a replacement vehicle when one in your fleet is damaged.
Accessories coverage: For GPS, radios or other equipment installed in your vehicles.
Garage liability: To cover any day-to-day maintenance and repairs you make on your vehicles.

An insurer that offers supplemental insurance you can sell to customers at the counter may make sense for your business as well. These policies typically fall into three categories:

Supplemental liability insurance: This coverage protects the vehicle’s driver in case they cause bodily harm or property damage to a third party.
Personal accident insurance: This coverage protects the vehicle’s driver and anyone else in the car in the case of accidental death or emergency medical services.
Personal effects insurance: This coverage protects the individual who rents your car in the event their personal property is stolen or damaged while they’re using the vehicle.

How much is car rental business insurance?

The cost of insuring your car rental business will depend on factors including your business location, size and number of employees. These factors also influence commercial fleet-related policies, but prices are more heavily influenced by:

The number of cars in your fleet.
The type of vehicles — trucks, for example, are more expensive to insure than passenger cars.
The condition, age and value of the vehicles.
Any equipment or accessories the vehicles have.
Your policy coverage and limits.
The insurer you work with.

Compared with many small businesses, insurance costs for car rental businesses may be on the higher end of the spectrum, considering the risks associated with rentals and driving. For this reason, car rental businesses may incorporate insurance costs directly into their rental car prices — or add a separate insurance charge to the bill of each vehicle they rent.

» MORE: How much does small-business insurance cost?

Article sources

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Methodology

Business insurance ratings methodology

NerdWallet’s business insurance ratings reward companies that offer small-business owners reliability and ease of use. Ratings are based on weighted averages of scores in several categories, including financial strength, customer complaint data, shopping experience and customer service. Learn more about how we rate small-business insurance companies.

These ratings are a guide, but insurance policy details and prices can vary widely from business to business and provider to provider. We encourage you to shop around and compare several insurance quotes.

NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2021.

To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.

Our star ratings consider ratios for both general liability insurance and commercial property insurance. When an insurer sells policies that are underwritten by several different insurance companies, we consider the NAIC complaint ratios of all the underwriters.

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