The COVID-19 virus has turned our lives upside down, and it’s easy to feel powerless against this unprecedented disruption in business and life as we know it. However, it’s important to remember this pandemic provides you the unique opportunity to take time to drill down into your business and make some necessary adjustments. It’s time to look to all your partners, including the insurance companies, to put your business in the best position possible. 

I’m reminded of a famous JFK quote that seems particularly suited for this time in history: “When written in Chinese, the word 'crisis' is composed of two characters. One represents danger and the other represents opportunity.”

One big opportunity is to engage insurance companies, encouraging them to rise to the occasion and be true partners in this time of crisis. It’s very easy for the insurance companies to say that they are with the operators, but unless they make some accommodations, there will be substantially fewer operators once the world gets back to normal. Insurance companies should step up to the plate, and it’s aligned with their own long — term business interests. 

The insurance companies with the assistance of your insurance broker can — and should — help you get through this crisis.  

This is the time to make a realistic forecast on how many units will be needed in your fleet and reduce as many units as you can from your insurance coverage. Try to park these units in a safe location — you may want to consider taking the tags off them — and make sure all your rental agents know that these units are not available. This will significantly lower the monthly insurance bill. 

When you need additional units and want to add them back into the fleet, the insurance companies typically say you must wait 30 days from the date you deleted a unit from your fleet until you can have the unit back in operation. You have a rare opportunity to see if they will allow you to delete a vehicle from insurance coverage and waive the 30-day rule. Insurance companies are making a lot of accommodations that would previously have been unheard of and you’ll never know if you don’t ask. 

Equally important, let’s examine your monthly premium payments. All insurance companies are holding deposits (without any interest paid to you) somewhere between 15% to 20% of the estimated annual premium. Understanding that you will be reducing your fleet for the time being, your estimated annual premium will be cut, maybe drastically. 

Therefore, why can’t they allow you to defer some of your premiums over the next few months? Or how about if you use some portion of the excess deposit to help pay the monthly premiums? The insurance companies are holding anywhere from what is actually one month to maybe two months insurance premiums on deposit. I’m certain they can use a percentage of that excess deposit money for the next few months. When the smoke clears, all you will need to do is replenish the deposit if necessary.

If the insurance companies, who should be your partners, can think outside of the box and come up with creative ways that they can cooperate for the good of this partnership, then in the upcoming months you will still be in business. 

I know that the last thing the insurance companies want is to lose any of their clients. It’s the right thing to do and makes sound financial sense for them not to conduct business as usual. Now is the time for insurance companies to consider this as an opportunity to demonstrate the strength of this partnership.

Bill Tierney has been writing insurance to the car rental industry for six decades. He can be reached through