What is self-drive hire insurance?

Self-drive hire insurance is a specific insurance for vehicle hire companies. Businesses that want to rent out vehicle(s) must have an insurance policy to cover vehicles out on hire and give cover for vehicles that are not out on hire. This is something a standard vehicle policy cannot offer. A vehicle rental company must have Self Drive Hire Insurance.

Although self-drive hire insurance appears self-explanatory on the surface, there can be instances where it’s more complicated than it initially seems. This might be why surprisingly few insurance brokers offer it, and those that do don’t always have an experienced team of in-house experts to arrange cover.

To help you get started, we’ll talk you through the key points, so you end up with a policy tailored to your needs.

What is covered by self-drive hire insurance?

First up, self-drive hire insurance is required for any vehicles hired out on a temporary basis, where they will be driven by someone other than the owner.

Specific policies are often tailored to specific types of vehicles. Self-drive hire insurance can cover almost any type of motorised vehicle, such as

• Cars
• Vans
• Minibuses
• Motorhomes
• Camper vans
• Horseboxes

The core component of all self-drive hire insurance is motor insurance, which is a legal requirement. However, standard motor insurance is not sufficient on its own. This only covers a named driver in a named vehicle. If you’re hiring your vehicle out to another person, even if it’s on an informal basis, you’ll need to have self-drive hire cover both for legal reasons and your own protection.

If you’re hiring out live-in vehicles, make sure you have fire insurance that covers cooking and heating.

You should also be clear in your mind about whether your insurer will allow you to hire the vehicle to members of the entertainment industry, such as musicians and actors. While we can arrange this cover, many insurers don’t include it or will charge an additional premium for this cover.

How much does self-drive hire insurance cost?

The cost of self-drive hire insurance varies from one provider to another and will take into account your particular requirements. For instance, if the vehicle is being taken abroad you’ll need to make sure it’s covered once it leaves the country. You may also need breakdown cover and insurance against theft. If you’re running a self-drive hire business, it’s also worth having legal and liability insurance to cover you against the cost of any legal claims made by a vehicle hirer or a third party.

Annual cover or pay as you go?

When looking at costs, you need to decide whether you want to take out comprehensive annual cover or to pay as you go (PAYG).

PAYG insurers often require an initial set-up fee that can be up to £1000, plus daily charges every time you hire out a vehicle. You’ll also need additional cover for when the vehicle is off-hire. By law, you must have insurance for all taxed vehicles, even if you’re not driving them. Most social, domestic and pleasure car insurance isn’t suitable for self-drive hire vehicles – and if you choose this route without checking with your insurer, you could invalidate your cover. You would need a motor trade policy instead. It’s also worth bearing in mind that you’ll have to reapply and fill in forms every time you hire it out.

With annual cover, you only need to fill in the forms once, no matter how often you hire out any of the vehicles covered during the year. Obviously, if you’re going into the hire business this is the best option.

An annual policy can also be tailored to your needs, making sure you’re fully covered without paying for extras you don’t require. For instance, cover can be arranged for off-hire use for up to four drivers, which is handy whether you’re running a business or hiring out vehicles that you use yourself. Add-ons can be arranged as needed too.

Shop around with the aid of an experienced broker, like Alan Boswell Group, and you’re sure to find a provider that can meet your self-drive hire insurance needs.