Can Budget increase the amounts of insurance carried by the Budget licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee will maintain such insurance, in such minimum amounts, and with such carriers as approved by Budget in its sole discretion or, as are prescribed in the Standards and in this Paragraph 9.4.
Licensee will annually provide a current certificate of insurance to Budget naming Budget and its affiliates as additional insureds as prescribed by Budget in the Standards, and the insurer must waive any subrogation rights it may have against Budget.
Budget may periodically increase the amounts of insurance carried by Licensee and require different or additional kinds of insurance to reflect inflation, changes in standards of liability, higher damages, Licensees specific claims history or other relevant circumstances.
Budget reserves the right to receive an administrative fee or commission for its endorsement of certain insurance carriers and/or programs for the sale of supplemental liability and related insurance to rental customers.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget has the authority to periodically increase the required insurance coverage amounts for its licensees. This adjustment can be made to reflect factors such as inflation, changes in liability standards, increased potential damages, a licensee's specific claims history, or other relevant circumstances.
This provision means that a Budget licensee may face increased insurance costs during the term of their agreement. These increases are not arbitrary but are tied to identifiable factors that affect risk and liability in the car rental business. The franchisee should factor in potential insurance increases when projecting their operating expenses.
Furthermore, Budget retains the right to approve the insurance carriers used by the licensee. Licensees must also provide Budget with an annual certificate of insurance, naming Budget and its affiliates as additional insured parties. The insurance provider must waive any subrogation rights against Budget. Budget also reserves the right to receive an administrative fee or commission for its endorsement of certain insurance carriers and/or programs for the sale of supplemental liability and related insurance to rental customers.