By Jeanette Beardsley, Walter L. Clark & Associates
© RTO Online, Inc.

A traditional rent to own store is insured much like a retail location, with product liability coverage as well as liability for the premises. Renting tires and rims requires specialized insurance.
Jeanette Beardsley, Walter L. Clark & Associates

Many enterprising Rental Purchase companies are adding Tires and Rims to expand their client base. Unlike previously rented furniture or appliances, renting "used tires" caries additional risk. Because it is a more hazardous product, especially if installing and/or balancing, dealers should verify they have the proper insurance coverage.

A traditional rent to own store is insured much like a retail location, with product liability coverage as well as liability for the premises. Renting tires and rims requires specialized insurance. Coverage should be on a "Garage Form" and should be a separate policy. Your operation may also require "Garage Keeper's" to cover a customer's vehicle during installation and for any damage incurred on your premises.

Due to the increased risk of renting tires and rims, Walter Clark and Associates recommends forming a separate corporation protect one operation from the other. Check with an attorney for your individual circumstance. In some circumstances, a policy on the Furniture Store would not be the same type of policy for the Tires and Rims. Combining the two operations in a single corporation can cause problems; some examples....

One claim under the Tires and Wheels operation could pull in both insurance policies resulting in stacking the limits since the ownership is the same.

Established assets in the Rental Purchase Furniture operation could be attached in a claim from the Tires and Wheels operation since there is no separation of ownership.

Most insurance companies are unwilling (if they are aware) to write coverage on one operation if there is another with the same ownership unless they are separate
corporations.

The insurance market availability is very limited and different in different parts of the Nation for Garage type policies.

For more information, contact Jeanette Beardsley, CPIW; AIS, Lic # 0A65267, Walter L. Clark & Associates, 1-800-457-9362, 1055 W Morton Ste C. Porterville, CA 93257.