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Will your business auto policy cover you in a rental car?

Car_map Here’s a short quiz:

1. Are you a business owner that uses your vehicle for both business and personal use?
2. Is your vehicle titled to your business entity?
3. Is your vehicle insured under your business auto policy? 

If you answered “yes” to these questions, then you will be surprised to learn how this affects you when renting a vehicle.

This subject was sparked by a recent meeting I had with a prospective client. As we discussed his vehicles and coverage, I learned that all of his personal vehicles were titled to his business.

While he had them insured under a business auto policy, he did not have the proper endorsement that would cover him should he rent a vehicle.

Now, you might be thinking "how often does that happen?"

Well in my most recent spring break travels, like many others, my family took a road trip this year. As we were driving down the freeway, I noticed many rental vehicles on the road. At the hotel, we met a family that owned a small business in Texas. We ran into them again later at a nearby outlet mall and I noticed that they were traveling in a rental vehicle. After noticing that, I wondered if they were at risk.

So what does this mean to you? Well, it’s simple. If you answered “yes” to the questions above, you may not have coverage if you rent a vehicle.

What can be done?

Just be sure that you have the hired auto endorsement on your policy.

The cost is minimal and will ensure that your liability insurance is carried over in the event that you need to rent a vehicle. It is also a good idea to review your vehicle use with your agent.

As Brian mentioned in a previous article, keep personal, personal. Therefore, if you no longer use your vehicle for business, then it may be beneficial to re-title the vehicle and insure it under a personal policy.

This can give you broader coverage and save you money.

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