A rental car is a good option for people who cannot afford buying a car. However, with rental cars, you can avoid regular car maintenance costs, but not car insurance costs. Hence, to have a car on rent, you will have to own insurance too. Hence, learn how car insurance works for rental cars.
Various companies have come up with a new option: hiring cars but just fueling them up and driving without worrying about warranties, maintenance, more. The rental cars are available on rent for a single day to even months. Although, customers can avoid maintenance costs with rental cars, but not car insurance costs. Let’s go through the working and basic aspects of rental car insurance.
Safety concerns in car rentals are still extremely important. Getting the right insurance policy to protect you against any unforeseen circumstances is really important, especially in case of an accident. Renting a car without vehicle ownership can be more difficult than you know.
There are many things to consider including whether or not you have insurance for your rental. So, let us move ahead and talk about some of the important things about car rentals instead of focusing on why you might not own a car in the first place.
The key difference between car insurance for rental cars and buying a car is that the first one is not transferable. If you buy a new car, you can sell it at any time, but with rental cars, the owner is the only person who can use it.
Table of Contents:
Advantages & Disadvantages of Rental Car Services:
| Pros |
Cons |
| The freedom of Plan |
Cost incurred |
| Cost effective |
Caution Required |
| Comfort and Convenience |
Unfamiliar controls |
What is Car Insurance for Rental Cars and Why Do You need it?
Rental Car Insurance differs from regular car insurance. Apart from fulfilling the legal liability, the objective of an insurance plan is to provide coverage to the policyholder for the expenses that occurred in repairing or replacement of the damaged part. Also, the coverage provided by the insurer depends upon the geographical location of the rented car. So, here are the types of coverages provided under the rental car insurance.
Car rental companies provide insurance for their customers. This is to protect the company from liability, and to protect the customer from any damage that may occur. Car insurance for rental cars is a type of car insurance that provides coverage against loss or damage to a vehicle while being rented out.
In order to ensure this coverage, some car rental companies require you to purchase a policy before renting your vehicle. Rental car insurance provides protection against many different types of risks such as damage caused by theft, fire, or an accident while the vehicle is being rented out.
What are the Steps to Take after Car Rental Accident?
If you’re able to follow the steps outlined after a rental car accident, you’ll be on the road to putting it behind you.
- Survey the Situation
- Call 9-1-1
- Collect Details
- Contact Third Parties
- Take care of yourself!
Importance of Car Rental Insurance Cover:
The most common question when it comes to renting a car for domestic travel is “do I need rental car insurance coverage?” The answer is: it depends. You want to make sure you and your rental vehicle are covered, but you also don’t want to pay for unnecessary duplicate insurance coverages that could double the price of your rental.
When someone takes a car on rent to drive, they might refrain them to purchase a new car, but responsibility for damages sustained by the car often cannot be avoided. Hence, owning an extensive car insurance plan is essential to cover any rented vehicle.
The rental car insurance policy will provide protection against bodily injuries, death and property damages to third-party, theft of the rented car, and damages sustained by the car. Below listed are some advantages of rental car insurance coverage:
- A supplemental insurance cover that provides an added layer of protection.
- The injured party's Personal Accident Insurance can help with medical expenses resulting from an accident or mishap.
- Collision Damage Waiver offers coverage against the damages caused to your car by crashes, like scratches or dents. Meanwhile, the Super Collision Damage Waiver provides coverage against losses caused by incidents such as glass breakage and theft. The latter provides complete coverage even if the car is badly damaged.
- Uninsured Motorist Coverage helps to protect you and your property from things like car accidents that may not be your fault. It's an important coverage to have, even if you don't anticipate driving where there's high risk for auto accidents.
- The Roadside Assistance cover comes in force when the rented car suddenly breaks down anywhere. In addition to offering damage expenses, this insurance cover will offer assistance if the rented car sustains a puncture, runs out of fuel, or gets broken down as well.
What are the Different Types of Car Insurance for Rentals?
Car insurance for rentals is different from traditional car insurance. It offers a few more coverage options and is more affordable. There are three main types of car insurance for rentals: basic, liability, and comprehensive.
- Basic coverage is the least expensive option but it only covers the rental vehicle in case of theft or damage to the rental vehicle due to an accident.
- Liability coverage covers damages that occur in case of an accident, such as property damage or injuries sustained by other people involved in the accident.
- Comprehensive coverage also covers damages that occur during an accident but it also provides protection against things like weather-related damages, vandalism, fire damage, and other hazards that may affect your car while you are renting it out.
Different Coverage Options that can buy with Rental Cars:
This conclusion will give you a quick overview of the different coverage options that you can buy with your rental car.
The type of insurance that you should buy with your rental car depends on what type of personal property damage coverage you need. If you are renting a car for a vacation and want to protect your belongings, then purchase comprehensive personal property damage coverage. If you are renting a car for business purposes, then purchase liability personal property damage coverage.
- Comprehensive Personal Property Damage Coverage: This covers any damage to your personal belongings such as clothing, electronics, luggage, jewelry and other items while they are in the care or custody of the rental company’s employees or agents.
- Liability Personal Property Damage Coverage: This covers any physical damage to your personal belongings while they are in the care
- Collision Damage Waiver (CDW): Collision damage waiver is the facility where damages to your rented car are insured. This cover is limited to include damages on the bodywork of the vehicle like scuffs and dents. Collision damage waiver does specifically exclude damages to consumable spares like battery, tyres, engine, gearbox, or even windshield and the interior. Further, reckless driving on the car is also excluded from CDW under rental car insurance coverage.
- Protection from theft: After insuring against damages, the second most common coverage is against theft. Theft of the vehicle when in your possession will make you liable to the rental car company. Not having rental car insurance coverage for theft will cause financial loss and hence advisable to purchase one whenever you chose to drive a rented car. This coverage also includes damages as mentioned above and thus offering dual protection of theft and collision.
- Third-party liability: Like a third party car insurance cover in a personal policy, rental car insurance also offers coverage for third-party liabilities. Any accident resulting in an injury to person or damages to property will be insured under this rental car insurance coverage. However, if you are found to disobey laws, then this rental car insurance cover shall not provide for the cost of damages or injury.
Why Renting a Car is Risky and What You Can Do about It?
Rental car insurance is a must-have if you plan on renting a car. But, do you know that rental car insurance can be a little tricky to get? There are many things you should consider before renting a car. For example, what type of rental agreement you have with the company?
If it's an unlimited mileage agreement, then your insurance won't cover any accidents that happen during the time of your stay. If you're planning on renting a car for only one trip and not having it for long, then it's not worth getting full coverage. You'll save money by not getting full coverage and still protect yourself from liability in case something goes wrong.
Check these things before purchasing Rental Car Insurance:
- How much coverage you currently have on your own car
- Maximum limit of Collision Damage Insurance
- Deductible
- Roadside Assistance Cover
- Coverage for the car
- Check whether the insurance company provides loss of use or towing charges
- Know the benefits before going to the insurance policy
How Many Car Insurance Companies are providing Rental Car Insurance?
There are several rental car insurance providers in the country. If you wish to get rental car insurance, you can look into these car insurance companies:
- TATA AIG
- Bharti AXA
- HDFC ERGO
- ICICI Lombard
When I wanted to purchase commercial car insurance, I had decided to compare car insurance online and learn about the different car insurance companies in India that offer good commercial car insurance.
ICICI Lombard, HDFC ERGO, TATA AIG, Bharti AXA and there are many more. But, the features regarding the car rentals and its insurance liabilities may get varied. So, you could check the respective provider site.
As per my research, you must choose a car insurance company based on these factors:
- Claim settlement ratio: The Claim settlement ratio is the number of claims settled against the number of claims filed. A higher claim settlement ratio is an indicator of a reliable insurance company.
- Customer service: An insurance company with good customer service will help you in the long run if you face any queries.
- Add-ons: Add-ons help you enhance the insurance coverage of your insurance plan. Your insurer must offer you the add-ons that you need.
- Easy claim process: An easy insurance claim process will help you at the time of filing a claim. After I researched the car insurance online, I decided to purchase the TATA AIG car insurance online. Their plan offers extensive coverage and is a suitable option among different insurance companies. I used their insurance premium calculator for getting car insurance online quotes. It helped me plan my insurance purchase online.
Best Car Insurance Companies that Provide Rental Car Insurance in India:
Car rental insurance is one of the most important things to have in case you are going on a trip. It covers damages to the vehicle and liability issues. We have listed out some of the best car insurance companies that offer rental car insurance in India.
|
Companies |
Claim Settlement ratio |
Cashless Garages |
| TATA AIG |
75.41 |
5400+ |
| ICICI Lombard |
65.77 |
9700+ |
| HDFC ERGO |
70.02 |
6800+ |
| Bajaj Allianz |
68.06 |
6000+ |
| Reliance |
76.89 |
6200+ |
Conclusion:
To ensure that you have an enjoyable time while renting, it is recommended to have comprehensive car insurance. This ensures that you are covered in case anything goes wrong during your trip. The monthly insurance plan of the car provides full protection for the car. It covers for any damages, theft, repair costs and roadside assistance.
You can now purchase insurance policies from insurers without going to the office and spending many hours waiting in long queues. With a web-based checkout process, purchases are made quickly and easily.
The companies also provide you with detailed comparison tables. You can choose one that suits you & proceed to purchase it online. With the online premium calculator, you can easily check whether the rental car insurance plan is within your budget or not.
Frequently Asked Questions of Rental Car Insurance:
Do I Need Rental Car Insurance?
If you already have car insurance for a personal vehicle, you probably don’t need rental car insurance. If you don’t already own a car with insurance, rental companies automatically cover the bare minimum in your state. However, if you want more protection, or if you’re traveling abroad or for business purposes, you might need to get rental car insurance.
Does My Car Insurance Cover Rental Cars?
Yes, you can use your own car insurance for a rental car as long as your trip is for personal travel. Your personal coverage limits and deductibles will apply. If the trip is for business, your personal auto insurance policy might not cover any type of damage or injury unless you have commercial coverage. However, your company may have a commercial auto policy that can cover the vehicle.
Are Rental Cars Insured?
Yes, rental cars are insured. A car company will provide insurance for the vehicle while it is rented. However, you should make sure that you have your insurance. Rental cars are not insured by the car manufacturer or the insurance company. They are instead covered by a third party insurance provider.
How much is full coverage insurance on a rental car?
If you purchase all the insurance a car rental agency offers, you’ll pay an extra Rs.2345 to Rs. 4892 or more per day. This includes the loss damage waiver, liability coverage and personal accident and effects coverage.
What happens if you damage a rental car without insurance?
Without insurance on a rental car, you’re responsible for any damage you cause. Rental cars come with the minimum liability coverage in your state, but that doesn’t cover vehicle damage that is your fault.
Is there a deductible in Car Rental Insurance?
Yes, there will be deductibles in car rental insurance, and you might have to pay a partial amount to cover the damage. But if you get Complete Coverage or Zero Deductible coverage, then the deductibles will not be applicable.