Nothing Parties Like a Rental!
Loss control is a critical component of managing your insurance costs and running a successful business, especially in the transportation industry.
With the total dollar amount of incurred losses for physical damage and the combined liability lines of business continuing to increase year-over-year, loss control becomes even more important.
If you rent or lease trucks for your business, be aware that leasing/rental companies are scrutinizing minor damages more closely than ever before due to rising repair costs. Insurers are seeing more claims filed by rental companies for normal wear and tear damages and becoming more stringent for what they are trying to get recovery.
Minor damages that occur in the course of normal use are no longer ignored. Rental/leasing companies will charge the policyholder for the repairs upon return of the truck. And, unfortunately, if you have enough claims as an owner/insured, your insurance policy can be in jeopardy of rate increases, coverage elimination for rental vehicles, or even non-renewal for adverse losses.
Some common claim incidents include:
- Driving through low hanging trees (roof bump or scratch)
- Sideswipe of an object
- Dent in fender/bumper from backup damage at dock
- Inside floor damage from cargo or pallets being dragged across floor
If you have a long-term lease and it is clear there are numerous damages, such as scratches or dents to multiple sides of the truck, they could be counted as multiple incidents and you may be subject to a deductible for each incident. Protective Insurance Company is aware of this rising trend and is very diligent about making sure the damage has been done by you or your employees. The documentation you have on hand is important.
Protective will only cover insured damage and won’t cover wear and tear. You could see a separate charge for that, so make sure you question a separate charge from the rental company for what is actually wear and tear.
If you rent or lease trucks from rental company, take steps to properly document the condition of the truck and any damages:
1. Always inspect rental/leased units thoroughly before taking possession.
2. Utilize an inspection checklist that you or your driver can use to review any preexisting damage before accepting the unit. Photographs of any pre-existing damage is very helpful.
3. Have drivers report all incidents (minor or major damages) to you as they occur and prior to returning each rental unit to avoid any unexpected claims.
With the rising cost of repairs, it will pay off in the long run to remind your drivers to treat a rental like vehicles you own, and not party like it’s a rental!
Renee Paul
Renee Paul is vice president of BizCHOICE Transportation, a division of Specialty Program Group, LLC. Renee has been instrumental in creating contract carrier insurance programs for the Heavy Bulk Last Mile Delivery segment of the transportation industry. She also has experience integrating a variety of technology solutions with insurance offerings to promote safety and compliance across transportation networks and logistics companies. Renee earned a Bachelor of Science degree with a major in Business Management and Administration from Humboldt State University, and is a licensed broker in Accident, Life and Health, Property and Casualty and Surplus Lines.