What You Need To Know About Claims

It’s a fact of life that claims happen.  As the rental operator, what do you need to know and what do you need to do?

First let’s start with what you, the rental operator, should do prior to a claim.

  1. At the beginning of each and every rental, you should collect the information for all drivers and their insurance.  If you don’t list a driver, they could be considered an “Unauthorized” driver and the claim could be denied.
  2. Have separate, detailed Check In/Out forms documenting any existing damage on the unit. Both you and the renter should sign off on these forms.  Many operators have gone digital, taking pictures of the unit with the renter in the photo.
  3. Have a detailed Walk Through form as a training check list. This will ensure that you didn’t miss anything and helps familiarize the renter with this particular vehicle’s features.  This form should also have you and the renter’s signature.
  4. Get signatures on the rental agreement and have the insured initial any pertinent sections.
  5. Make sure your renter knows what to do in the event of any accident.
  6. Do not send your vehicle out with potential safety issues or outstanding recalls. Sending a vehicle out on the road with a known, unfixed recall is illegal in many states.
  7. Do not allow the rental vehicle to tow anything. Your insurance covers your vehicle, not additionally towed objects.
  8. Make sure you have a current Auto ID Card in each vehicle you send out.

When an accident occurs, you should have procedures in place for your renters and staff to follow.

  1. Have the renter collect detailed information on any other vehicles involved, police information (what police department responded), exact location of the incident, the exact date of the incident, driver and insurance information.
  2. You should have procedures in place for local vs. long distance issues.
  3. Get photos of any damage as quickly as possible.
  4. You should make sure that if the damage is substantial or the integrity of the unit is compromised, that the unit can be secured in a way to prevent additional damage from occurring. DO NOT let your renter drive an unsafe vehicle.
  5. File the claim as soon as possible. Send the claims department as much information as possible.  Even though rental insurance is secondary, your insurance carrier must have the ability to assess the damage prior to any work being done.
  6. If your rental was obtained through a third-party reservation platform where your renter purchased additional insurance products or you sold a formal SLI product at the time of rental, include that information in the claim report.

Things to keep in mind when your vehicle comes back from a rental with damage:

  1. Normal wear and tear are NOT covered.
  2. Claims are defined by the specific incident that causes the damage. They are NOT defined by the rental period.  Therefore, if a rock breaks the windshield on your rental and the vehicle is returned with rear bumper damage too, the damage would be considered unrelated to each other and counted as two separate claims.  This means that your deductible would apply for each separate claim.
  3. Claims involving damage to your vehicle will be assessed minus your deductible amount. If the damage is under the deductible amount, no monies will be paid.
  4. Claims are appraised at ACV (Actual Cash Value).This means regardless that your 10-year-old vehicle is like brand new, it will still be appraised as a 10-year-old vehicle.
  5. If you’ve installed special equipment, keep your receipts, but keep in mind that these items will also be depreciated.
  6. Keep ALL maintenance records, especially when mechanical or safety parts are replaced. If a renter claims that the brakes were bad and caused the accident, but you had them replaced within the year, you need to be able to prove that you properly maintained the vehicle.

Nobody wants to have a claim.  Knowing how to handle them will ease the stress on your customers, staff and yourself.

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