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A Guide to Car Rental Business Insurance

By Eamonn Turley
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Eamonn Turley Insurance Expert

Eamonn Turley has a wealth of experience within different insurance sectors. Through hard work and over time, he has gained expertise in digital marketing and user interface design. Elements that are crucial to any successful online business. The key aim is to develop websites that are intuitive, fast to load and provide insurance quotes tailored to your needs.


Expertise: Digital Marketing, Insurance, Home Insurance, Vehicle Insurance, UI Design
from the MultiQuoteTime Editorial Team - Fact checked

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July 2023

Car rental business insurance, sometimes referred to as self drive hire business insurance, is a specialist policy for companies that rent out vehicles to members of the public. Whether you run a small fleet rental business or operate a large fleet with a lot of hired cars, a car rental business insurance policy can cater to the unique risks associated with the business.

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What type of insurance does a car rental company need?

If you run a vehicle hire or rental business, you will need self drive hire insurance, this is a legal requirement. Typically, you may need self-drive hire insurance to cover your vehicles when customers use them during a specific rental duration or hire period

As a vehicle rental firm, you're faced with risks like vehicle damage, potential liability claims, and damages caused to others by drivers with your rental cars. The self drive hire insurance is a specific type of policy that covers for these unique risks that come with the vehicle rental business.

Depending on the insurance provider, the self drive hire insurance can be referred to as rental insurance, self drive hire fleet insurance, rental fleet insurance and more. You may also want to consider other additional types of insurance coverage like commercial vehicles fleet insurance, general liability insurance, excess liability insurance, commercial property insurance, and workers' compensation insurance.

How does car rental business insurance work?

Various insurance providers may structure their vehicle rental business insurance differently. However, it is common to find options that allow you to pay monthly, annually or on a "pay as you go self drive hire cover" basis. Usually, self drive hire insurance policies will offer static cover, owner use cover, and hire insurance cover.  

Static cover will insure your fleet when they are not in use or when they are parked. Owner use cover will provide insurance when you're driving your own rental vehicle. Hire insurance will cover eligible renters while they use your vehicles. 

How much is car rental fleet insurance?

There's no one-size-fits-all price for self drive hire insurance because various factors contribute to how much you'll be billed by your insurer.

Some of the factors considered by insurers to determine the cost of your car rental business insurance include your fleet size, your location, your level of coverage, parking area, security systems of your hire vehicles, and any policy add-ons you may opt for.

Basically, when insurers calculate car insurance costs  for self drive hire operators, they are evaluating the risks associated with insuring self drive car hire businesses, and the likelihood of that business making a claim. To determine the insurance price plan that works best for you, you'll have to compare different providers and their levels of coverage.

How can I lower the cost of vehicle retal buisness insurance?

You may reduce the cover costs of your self drive hire business insurance by paying for your insurance premiums annually instead of paying monthly instalments. In addition, ensure that you have security systems and measures in place for your rental vehicles and adhere to exclusions and age restrictions stipulated by your insurer, amongst others.

Please note that while it's okay to seek ways to lower your insurance costs, it is also important to ensure that you get the right insurance cover for the risks your business faces.

Are there restrictions when it comes to car rental business insurance?

The common restriction when it comes to car hire insurance is the age of drivers who can rent your fleet vehicles. Typically, your insurance policy may allow you to rent your vehicles to only individuals who are aged around 21 to 70 years and held a driving a licence for at least 2 years. Other conditions will apply so read terms so you can be compliant example restriction will apply for drivers with driving convictions or excessive points on licence

In all cases, your insurers will require you to vet the driving history of individuals before renting out any  vehicle to them. Also, the insurance provider may require that the drivers you rent your vehicles must have held their driving licence for a specific period of time (typically 1 to 2 years).

To find out the restrictions and exclusions attached to your car hire insurance policy, ensure that you read the policy documents provided by your insurer to get further details.

Can I add other vehicles to my car rental insurance?

Yes, you can add other vehicles to your car rental insurance policy. With a fleet self drive hire business insurance, you can cover multiple vehicles under one policy, with one renewal date.

So, no matter what kind of vehicles you hire (motorhomes, cars, bikes, or vans) you'll find a policy that meets your needs.

What can I be insured for with self-drive hire insurance?

What you're covered for will vary depending on your insurer and the level of cover you opt for. Commonly, with comprehensive self drive pay as you go  hire insurance, you can be insured for rental vehicle losses or damages, fire, theft, legal cover, indemnity to principals, windscreen cover and more.

The amount of coverage you have can be altered based on the demands of your business. You can also add extra features to your policy, like breakdown cover, European cover, off-hire cover, public liability, employers’ liability, etc.

There are three major levels of insurance covers for vehicle rental company insurance, namely:

  • Third-party only - provides cover for damages caused by your rental business operations to other people but doesn't cater to your damages. It is the basic level of cover required by the law.
  • Third party, fire and theft - offers the same coverage as that of third party only, with additional coverage for you in a situation where your vehicle is damaged by fire or stolen.
  • Comprehensive - covers everything in the third-party, fire and theft levels. Plus, it includes additional coverage for repairs and replacement of your rental vehicles if they are damaged due to an insured event like a road accident, etc.

Steps To Reducing the Cost of Business Rental Fleet Insurance?

Lowering the cost of business multi van insurance quotes entails taking steps to lower your risk in the eyes of the insurance broker. If you pose a lower risk, you should be rewarded with a lower quote.

  • Security: Ask yourself, can you lower the likelihood of your vans being stolen. Can you provide secure overnight parking? Can you add tracking devices that are insurance approved? Consider these questions and also speak with your broker for further advice on improving your van fleet security. 
  • Drivers: Agree driver restrictions, maybe you can agree a higher minimum age of 25 which will lower costs than if you were to include under 25 age drivers 
  • Insurance  : the amount you or the business will take responsibility for in any claim. Increasing this will normally reduce your annual policy. Speak with your broker on this option.
  • Multiple Quotes : Like any purchase, you will need to do some upfront research to help find the best quote that meets your requirements and is also affordable. 

Who Provides Car Rental Fleet Insurance?

When shopping for a self drive hire insurance, consider the features, price, as well as other terms and conditions that come with the policy. We recommend that you get multiple car rental business insurance quotes before subscribing to any policy. This will help you choose the right cover and insurer for your unique rental business needs.

Did you know? If you rent out vehicles ( Vans, Cars, Bikes, Truck or Motorhomes ) you need a special type of insurance to cover your fleet when hired out and when parked in the car rental parking lot.

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