Difficult Market = New Opportunities: Short Term Auto Rentals
Difficult market conditions, rising gas prices, automotive microchip shortages resulting in new car shortages, and parts availability resulting in manufacturer and repair delays. These conditions have led to an increased demand for rental vehicles. This can be an opportunity to help your currents with expanding their operations in a demand driven marketplace.
National Indemnity reports that Rental Operation new business binds are up by 22% compared to 2020, and by 15% compared to 2019. This could be a great opportunity for garages, body shops, or used car dealers. If you get in at the ground level, this could be a long term insured for you. The retention of this style of account is amongst the highest retention rates of all National Indemnity classifications.
Some things to consider:
Short term auto rental is defined as an automobile rented for 30 days or less and without a driver. Our appetite consists primarily of personal use autos not intended for livery or for-hire trucking operation. The coverage is designed to be excess over the rentee’s insurance. Please be sure the applicant will verify to whom they rent and how the vehicles will be used and verify that the applicant has a commercial location. If operating out of a residential location, it is a sign they might be doing peer-to-peer car sharing, which is not an exposure we want to consider due to the lack of control by the applicant.
In addition to supplying a Short Term Rental Application, the applicant will be required to submit a copy of their rental agreement. Rental agreements should contain information such as:
The minimum age requirement of Rentee. 21 years old is the youngest we can consider and any younger and there are concerns of a lack of general driving experience
Terms in place requiring the rentee to provide insurance and verified by rental company
Call us today for additional information on any requirements or limitations.Share on Facebook Share on LinkedIn
Posted by Matthew R. White, Commercial Auto on Jul 19, 2022