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🔑 '''Hired auto physical damage coverage''' is an optional [[Definition:Insurance coverage | insurance protection]] that pays for damage to vehicles a business rents, leases, or borrows for work purposes, covering repair or replacement costs resulting from [[Definition:Collision | collision]], theft, vandalism, or other covered [[Definition:Peril | perils]]. Unlike [[Definition:Hired and non-owned auto insurance | hired and non-owned auto liability coverage]], which protects against third-party [[Definition:Bodily injury | bodily injury]] and [[Definition:Property damage | property damage]] claims, this coverage applies to the hired vehicle itself — addressing the contractual obligation most rental agreements impose on the renter to return the vehicle in its original condition.

🛠️ Businesses typically add this coverage as an endorsement to their [[Definition:Business auto policy (BAP) | business auto policy]], selecting either [[Definition:Comprehensive coverage | comprehensive]] (other-than-collision) protection, collision protection, or both. [[Definition:Underwriter | Underwriters]] price it based on the estimated annual cost of vehicle rentals, the types of vehicles typically hired, and the [[Definition:Deductible | deductible]] the insured selects. When an employee damages a rented car — say, in a parking lot collision during a client visit — the business files a [[Definition:Claim | claim]] under this endorsement rather than relying on the rental company's often-expensive damage waiver or the employee's personal [[Definition:Auto insurance | auto insurance]], which may not extend to business use. The insurer pays the repair cost minus the deductible and may also cover [[Definition:Loss of use | loss-of-use]] charges the rental company assesses while the vehicle is out of service.

💰 Companies that rent vehicles regularly — construction firms sending crews to job sites, sales organizations with traveling representatives, or event-management companies — can save substantially by carrying this endorsement instead of purchasing collision damage waivers at the rental counter, which often cost $15–$30 per day per vehicle. Beyond cost savings, the coverage ensures consistent protection across all hired vehicles and simplifies the [[Definition:Risk management | risk management]] process. [[Definition:Broker | Brokers]] often pair it with hired and non-owned auto liability to create a comprehensive package that addresses both first-party and third-party exposures from vehicles the business uses but does not own.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Hired and non-owned auto insurance]]
* [[Definition:Business auto policy (BAP)]]
* [[Definition:Collision coverage]]
* [[Definition:Comprehensive coverage]]
* [[Definition:Physical damage coverage]]
* [[Definition:Commercial auto insurance]]
{{Div col end}}

Definition:Hired auto physical damage coverage - Revision history

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