What is Equipment Rental Insurance?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 02 September 2019
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Equipment rental insurance is an insurance product that covers people in the event of loss, theft, or damage to rental equipment. Many equipment rental companies offer this as an extra service with a rental, and people can also purchase it independently to cover their needs, if they are concerned about liability for damages. This insurance product is very common and people may be able to obtain it through their regular insurance provider, or receive a referral to a partner company if an insurance firm does not write policies for equipment rentals.

Rental equipment can potentially be very expensive to replace, especially in the case of heavy machinery and equipment like boats. In the event of loss or theft of rental equipment, the equipment rental insurance will cover the replacement cost, reimbursing the owner and leaving the policyholder without out-of-pocket expenses. This insurance can also cover repairs for damages associated with the equipment rental.

Usually, equipment rental insurance does not cover negligence, recklessness, and related behaviors. People who damage or destroy property because they do not exercise due caution, like failing to operate a motorboat at a safe rate of speed, will not be provided with coverage. There may be other specific exclusions in a policy, such as a refusal to cover certain kinds of damage. People purchasing equipment rental insurance should look the policy over to make sure they understand the extent and limitations of the coverage. This can prevent costly mistakes.


If insurance is available through a rental company, people will usually pay extra for the convenience of having the company take care of the insurance. It may be cheaper to get a policy directly from an insurance company. People concerned about pricing can get quotes to see which option is the least expensive. It is also important to avoid overinsurance; for instance, sometimes credit cards cover rentals, in which case equipment rental insurance may not be necessary for the customer.

When rental companies offer equipment rental insurance and people decline this option, the clerk may ask the customer to sign a document stating that the person is accepting liability for loss, theft, and damages. This document will be used in court if the customer later disputes charges from the rental company, to prove that the customer was offered insurance and declined in full awareness of the potential consequences. It is advisable to review the document carefully for any hidden surprises before signing.


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