Business Auto Insurance

Reader’s Question:

I have just recently registered my car rental business. The cars will be delivered in a month, but I haven’t decided what auto insurance to get yet. I heard about this small business auto insurance plan. Will this be more advantageous to me, or is it just the same as getting personal auto insurance for each car?

Bobby

San Francisco, CA

Bobby, it seems the car rental industry in San Francisco is booming despite what others say.

In any case, I would say a business plan or rather, in your case, a small business auto insurance would be more advantageous than getting a personal insurance for each car. Aside from cheaper auto insurance rates you will be getting, you will get the coverage tailored fit to your business needs. You should know that a personal auto insurance will not cover you if they found out that you have been using your car for business purposes.

Imagine this scenario: Let’s say you started with ten cars. So, that means your business depends on the temperament of those renting your cars. I doubt that all your renters will be good drivers. Imagine one of your renters getting into an accident. That, of course, will be your company’s liability since you own the car, even if it is the renter’s fault. What if somebody gets hospitalized and the bills would be enough to close your business?

So, what I’m saying is if all your ten cars are out on the road everyday, that means you are exposed to risk ten times, too. Now, the only way to leverage that risk is to get a small business auto insurance coverage with ample liability coverage, so your business won’t suffer if in case one of the cars gets involved in a car accident.