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Loring is a Los Angeles-based writer, director, and creative producer. His work has been commissioned by a diverse range of clients- from Havas Worldwide to Wisecrack, inc.- and has been screened around the world. Through a background that blends project development with physical production across multiple formats, Loring has developed a uniquely eclectic skillset as a visual storyteller.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
For low-budget productions, the high cost of auto insurance can seem like a burden.
The cheaper policies offered by rental car companies and premium credit card programs are a tempting alternative to the more thorough, more costly coverage provided by full production insurance. On paper, their speed, ease, and efficiency grant them an undeniable appeal.
In practice, however, they come with a distinct catch. Simply put, these policies often don’t provide quite the protection producers think they do.
In this post, we’ll dig into the hidden risks of auto insurance policies offered by rental car companies and premium credit cards. We’ll explore what such policies cover, why they can leave professional productions vulnerable, and how producers make sure their next project is adequately protected.
If you’ve ever rented a vehicle for any reason, you’ve almost certainly experienced the hard sell of rental company insurance. For just a small fee per day, the rental company will cover the rented vehicle under their own insurance policy. All you have to do is accept the charge and sign a contract.
For producers, the simplified process behind these policies is the main appeal. Rental company insurance is fast, easy, and relatively cheap to secure. The upfront cost is low. The paperwork is simple. And, in the event of an accident, the listed deductible is often smaller than it would be with a more bespoke policy.
However, as is always the case with contracts, the devil is the details. You have to read the fine print carefully to know what’s really going on.
In the case of rental company insurance, the first detail to note is that the rental company already has insurance for the vehicles they rent out, regardless of whether or not a customer opts into the insurance program. The company has to protect its assets and, therefore, has to maintain adequate insurance. When you sign an insurance contract with a rental company, what you’re actually signing is a waiver that says they won’t come after you—as the renter—for damages.
While that fact is important in its own right, it also opens the door to a more critical detail. The true risk of relying on rental company insurance is that such policies often exclude several types of coverage. The precise combination of coverages will vary from policy to policy, but it is not uncommon for rental company insurance to exclude coverages for items like third-party liability, damage to other vehicles, and property damage.
In the event of an accident, for example, the rental company insurance will generally cover any damage to the rental itself, but the policy may not cover damage to the other vehicle involved in the incident. Similarly, if the accident caused damage to a separate property (i.e. a fence, building, etc.), the rental company insurance may not cover the resulting costs.
When it comes to production insurance, such coverage gaps represent a massive risk exposure. They leave productions financially vulnerable to not only unpredictable costs but also the quagmire of litigation. If an accident even debatably falls outside the scope of a rental company’s policy waiver, the resulting insurance claims could drag on for years, incurring what would have been avoidable expenses throughout the entire process. In the worst-case scenario, an inadequate policy is an existential risk for a project’s financial future.
Insurance for auto rentals is an increasingly common perk offered by premium credit cards. It’s a small touch that can provide enormous value to the right customers, but coverage isn’t always as straightforward as you might assume.
For producers trying to fit insurance into a tight budget, the price tag on credit card auto insurance speaks for itself. If credit card perks are “free,” then choosing to use an insurance perk instead of a separate policy seems like a financial no-brainer. Again, however, complications can brew in the fine print.
The first pitfall of credit card auto insurance lurks in the difference between primary and second coverage. Primary coverage pays the costs associated with an insurance claim directly, while secondary coverage only pays after separate primary coverage has been activated.
If you were in an accident, primary coverage operates exactly as your personal auto policy would. You file a claim, and the insurance company pays that claim. Secondary coverage would only come into play afterwards to reimburse your deductible or other relevant expenses.
As you might’ve guessed, most credit cards come with auto insurance perks that only offer secondary coverage. Secondary coverage can be valuable, but it’s not a substitute for a policy that secures primary coverage. While primary coverage perks do exist, they’re relatively rare on today’s credit card market.
The second potential pitfall of credit card auto insurance is the existence of significant policy exclusions. For example, many credit cards will not cover specified vehicle types, like sports cars or trucks. Similarly, coverage may only be guaranteed for rentals within limited time constraints (e.g. no longer than a week) or geographic borders (e.g. inside the United States).
The misalignment of a production’s auto needs and a credit card’s auto insurance perk can be a recipe for disaster. Unexpected policy exclusions could lead to potentially devastating coverage gaps. Confusion over secondary coverage could lead to massive cash flow problems. Either condition could be ruinous for a project without much financial leeway.
Without appropriate due diligence, rental company and credit card insurance are risky, but that doesn’t mean the policies themselves are a problem. Under the right conditions, both means of securing auto insurance can be useful to a production.
To illustrate, here are two basic situations in which rental company or credit card insurance might prove valuable:
If a project already has strong production insurance in place, rental company or credit card insurance can safely act as a type of “bonus” protection. They can help independent producers mitigate risk at relatively minimal cost. For example, free secondary coverage from a credit card perk might be a smart way to reduce deductibles.
Rental company or credit card auto insurance can be an effective means of balancing speed and convenience for low-risk rentals. Producers should always review the terms of any relevant policy, but basic coverage is often suitable when renting typical vehicles for typical use within a typical time period. For example, a rental company might offer ideal coverage on a personal car to be used while location scouting for just a few days.
The key to effectively using any tool is understanding its strengths and weaknesses. For rental company and credit card insurance, that means looking past their relative ease and convenience to the vulnerabilities they can create for your production. Here’s a brief list of basic risks to keep in mind:
Ultimately, the real danger of any alternative insurance source comes from relying on assumptions instead of the fine print. If you need to rent a production truck, a credit card policy that excludes truck rentals will simply not do. With that in mind, let’s take a look at how to best maintain due diligence when arranging for auto rental insurance.
Insurance decisions should never be taken lightly. Learning how to evaluate the merits and vulnerabilities of a policy is a crucial skill for any producer.
Here are four best practices for producers considering rental company or credit card auto insurance:
The most essential component of any insurance policy is the coverage itself. With rental company and credit card auto insurance, there’s often pressure to react quickly, to accept or reject a contract in a few minutes or less. However, it’s imperative that producers resist that pressure and confirm what’s covered under the policy before making their decision.
If an insurance policy does not cover your exact needs and reasonably expected risk exposures, then it simply isn’t adequate.
The act of comparison can be a source of valuable information. With more information, you can make a more well-informed decision. When possible, take the time to compare rental agreements and policy details. It’s a straightforward way to identify relative strengths, weaknesses, and possible policy gaps.
No one loves walls of text, but they play an important role in production insurance. Rather than skipping the long paragraphs of legalese, producers would do well to embrace relevant contract details. Look closely at the full terms and conditions of your credit card or other rental insurance. Doing so can not only help you to avoid mistakes but also to identify future opportunities.
When in doubt, seek the advice of an expert. A qualified insurance advisor can help you make better decisions with more speed and confidence. They’ll help you measure your risk exposures and determine whether you should rely on production insurance or may be able to leverage an alternate insurance source instead.
If you’re not in contact with an insurance advisor, Wrapbook’s expert insurance team is happy to help. We use our platform and our people together to deliver a uniquely powerful insurance experience that empowers productions to operate with more precision and more confidence.
Built on next-gen technology and a concierge service model, Wrapbook is a force multiplier for production teams. We leverage a combination of tech and personal service to streamline production insurance, ensuring that producers fully understand their coverage options and get exactly what they need.
Our in-house insurance team makes protecting your production quick, confident, and cost-effective. Their expertise makes it easy to close critical gaps left by rental or credit card policies, empowering your production to stay safe even when budgets are tight.
Check out our insurance offerings to discover more.
Rental company and credit card auto insurance can be useful tools, but they have to be implemented strategically and only after due diligence. Producers should weigh short-term savings against long-term risks carefully, keeping their eyes open to real-world limitations and vulnerabilities.
When in doubt, remember that Wrapbook is an insurance partner who provides clarity, compliance, and protection. To learn more about how Wrapbook can streamline and safeguard your next shoot, reach out to our team.
