Rental Car Insurance: Insurance for Rental Vehicles
Updated On Oct 19, 2023
All About Rental Car Insurance
Owning a car means one is legally required to have auto insurance. It provides financial security against unanticipated expenses, theft, and harm to the vehicle or other people. Having comprehensive auto insurance is not only required by law but also an essential safety precaution for drivers, as the roads are becoming more and more dangerous.
Table of Contents
- What Is Insurance for Rental Cars?
- What Is Covered by Rental Car Insurance?
- How Do I File an Insurance Claim for a Rental Car?
- How Can I Buy Rental Car Insurance Online?
- Things to Think About When Purchasing Rental Car Insurance
- Cons of Rental Car Insurance
What Is Insurance for Rental Cars?
Specialised coverage intended for cars that are hired out is known as rental car insurance. Rental car insurance makes sure you're protected from the financial consequences of mishaps or damages to the leased vehicle, whether you're renting for a quick trip, holiday, or professional use.
Comprehensive coverage, which includes liability to third parties, personal accident coverage for the driver, and coverage for vehicle damage, is a standard feature of rental car insurance.
These insurance plans can be customised for brief periods, such as a few days or weeks, since rental automobiles are frequently utilised for little periods of time.
Depending on their needs, renters can select from a variety of extra coverages or add-ons.
It sometimes contains third-party liability insurance, shielding the renter from financial and medical expenses brought on by mishaps that result in property damage or injury to other people.
When renting a car, you can easily acquire rental car insurance, which offers immediate coverage.
Is It Necessary?
- Financial Safety: It acts as a safety net for finances, paying for replacement, repair, or medical expenses brought on by mishaps or other covered incidents.
- Legal Compliance: It guarantees that renters, while operating a leased vehicle, adhere to the legal requirements of auto insurance.
- Peace of Mind: Renters can drive with peace of mind knowing that any expenditures are covered.
How it Operates:
- Purchase Option: Renters can choose whether to purchase rental car insurance based on their current coverage and risk tolerance. It is frequently an optional purchase.
- Claim Procedure: In accordance with the terms of the policy, tenants must get in touch with the rental firm or the insurer in the event of an occurrence giving rise to a claim.
What Is Covered by Rental Car Insurance?
Generally, rental car insurance provides a selection of coverage choices aimed at safeguarding the automobile and the driver. This is an explanation:
- Collision damage waiver (also known as loss damage waiver; CDW/LDW): This is a waiver, not traditional insurance, that pays for the cost of replacing or repairing the rental automobile in the event of damage.
The amount you are responsible for paying towards repairs before the rental company pays the remainder is known as the excess or deductible.
- Liability Insurance: It provides coverage for property damage, injuries, and death to third parties. This is important because it shields against any lawsuits resulting from accidents.
- Personal Accident Insurance (PAI): In the event of an accident, PAI pays for the medical expenses of both you, the renter, and your passengers.
- Coverage for Personal Effects (PEC): PEC provides insurance for personal items that could be taken from the rental car.
- Supplemental Liability Insurance (SLI): This adds to the normal liability coverage by providing extra protection against liability.
- Gap insurance: This pays the difference between the car's real cash worth and the remaining balance on the loan or lease.
Optional Add-Ons: Guests have the choice to purchase extra coverage, such as roadside assistance, which may not be covered by the basic rental car insurance policy.
How Do I File an Insurance Claim for a Rental Car?
Usually, filing a claim with rental car insurance is a simple procedure:
- Document the Event: Any theft, damage, or accident should be reported right once to the rental provider.
- Notify the Police: Make a police report if there is any theft or serious damage. Although the rental business might not need it for little mishaps, having proper paperwork is usually safer.
- Record the Situation: Take pictures of the damage, the other cars involved in the collision, the accident scene, and any pertinent signs or signals.
- Collect Information: Get names, contact information, and insurance information from any relevant third parties.
- Complete the Claims Form: Fill out the claim form provided by the rental business, making sure to include all pertinent incident data.
- Send in Documents: To bolster your claim, send in the police report, pictures, information on third parties, and any other necessary paperwork.
- Collaborate with the Insurer: Quickly reply to any queries the insurance or the rental company may have for more details or explanation.
- Follow Up: Until the claim is resolved, keep the rental company informed about the claim's progress and stay in touch.
- Crucial Advice: Read the terms and conditions of the rental car insurance policy so that you are aware of what is covered and what to do in the event of an incident. For your claim to be processed and approved smoothly, you should always report incidences as soon as possible.
How Can I Buy Rental Car Insurance Online?
You can easily buy a car insurance policy either through the insurance website directly or from InsuranceDekho.com.
Please follow the mentioned steps below to buy your Insurance Policy from InsuranceDekho.com -
- Visit InsuranceDekho.com and select ‘Car Insurance’ icon present on the Homepage
- Enter your Car’s Registration Number
- Confirm your Car’s details
- Provide some basic information such as your name and phone number to proceed
- Confirm some details about your car and the last policy such as
- No Claim Bonus (NCB) - What was the NCB in the last year policy
- Claim Taken Status - Whether claim was taken last year or not
- Confirm your previous policy expiry date
- Select Add-ons that you want to add to your policy such as Zero Depreciation, Consumables, Key Cover, Engine Cover, Roadside Assistance etc. Please note these add-ons will increase your net premium but provide you extensive coverage
- Select any company’s plan from a list of plans provided that you wish to buy
- Confirm some existing policy and add-on details, and then proceed to filling the proposal form
- Fill the proposal form to confirm/ re-confirm your personal details such as Name, Address; car details such as Engine number, Chassis number, previous year policy number; perform KYC (simple 30 second process - KYC has been mandatory for Govt. of India starting January 1, 2023)
- Confirm all details in the summary view and click on ‘Pay Securely’
- Make a payment using your preferred mode of option such as UPI, Credit Card, Debit Card etc.
- Once the payment is completed, your policy will be issued immediately
Things to Think About When Purchasing Rental Car Insurance
To make an informed choice, take into account the following important criteria when choosing rental car insurance:
- Existing Coverage: Verify if your credit card benefits or auto insurance policy already covers rentals; if so, you might not need to get additional rental insurance.
- Type of Coverage: Recognise the many possibilities for coverage (such as CDW, liability insurance, PAI, PEC, etc.) and decide which ones are essential for your circumstances.
- Geographical Limitations: Verify that the insurance for your rental automobile covers the region in which you plan to drive.
- Deductibles: Know how much is deductible. Premiums may increase in response to lower deductibles and vice versa.
- Exclusions and Limitations: To prevent unforeseen out-of-pocket costs, become familiar with the exclusions and limitations of the insurance.
- Cost: Evaluate the coverage offered and the price of the rental car insurance. Occasionally, the insurance premium could be nearly as much as the rental price.
- Policy Term: Make sure the policy lasts the whole length of your rental term if you're renting for a long time.
- Third-Party Liability: Depending on where you're driving, determine how much third-party liability is required.
- Provider's Reputation: Choose an insurance company that has a solid reputation for easy-to-work-with claims and dependable customer support.
Cons of Rental Car Insurance
Although it provides protection, rental automobile insurance has a number of disadvantages.
- Expensive Premiums: The entire cost of renting a car can be greatly increased by the high premiums associated with rental car insurance.
- Overlap with Existing Coverage: There may be needless redundancy if you already have coverage from your credit card or personal auto insurance.
- Limited Coverage: You may be exposed to specific risks and liabilities if your rental insurance policy offers limited coverage.
- High Deductibles: Substantial out-of-pocket expenses must be paid before insurance benefits begin to apply in certain policies.
- Geographical Restrictions: If you drive the rental automobile outside of a certain location, coverage might not be available.
- Exclusions: There are exclusions from every policy. Knowing what isn't covered is essential to preventing unpleasant surprises when filing a claim.
- Short-Term Validity: As the policy is intended to be used with rental cars, it is typically only valid during that time.
- Hurried Decisions: Upon renting, a tenant may experience pressure to decide right away without fully reading the terms and conditions at the leasing counter.
- Is insurance required for rental cars?
Although it is not required, rental car insurance is strongly advised in order to safeguard your finances in the event of mishaps, theft, or damage to the car you are renting.
- Are rental automobiles covered by my personal auto insurance?
In response, a lot of individual auto insurance policies include rental car coverage. It is imperative that you review and comprehend the terms and restrictions of your insurance before depending on it for coverage of rental cars.
- Should I purchase insurance for my rental automobile if I don't own one?
In order to safeguard yourself against any liabilities and damages while driving the leased vehicle, you can and should get rental car insurance if you don't already have a personal coverage.
- How much is covered by a collision damage waiver (CDPW)?
In the event of an accident or collision, a CDW will pay for the cost of repairs to the rental automobile, minus any applicable deductibles. It might also pay for the rental company's loss of use while the vehicle is being fixed.
- Is it possible to get insurance from the rental company somewhere else?
Yes, as a perk for cardholders, some credit card issuers provide rental automobile insurance. Additionally, third-party insurers offer rental car insurance.
- How can I file a claim on my insurance for a rented automobile after an accident?
In the event of an accident, notify the rental company, complete a claim form, and supply all appropriate paperwork, including a police report if needed. Your insurance provider or the rental business will assist you with the claim procedure.
- Is there international rental car insurance available?
The answer is that you may need to choose additional coverage options when renting a car abroad. For confirmation that you have sufficient insurance coverage for driving overseas, check with the rental business and your insurer.
- Do all automobile rental firms provide insurance for rented cars?
The majority of rental firms provide a range of options for rental automobile insurance at the time of rental. The coverage that best suits your requirements and circumstances can be selected.
- What is the daily average cost of rental car insurance?
The cost of rental automobile insurance varies greatly, depending on the type and amount of coverage chosen, the rental business, and the type of vehicle. It can range from approximately INR 500 to INR 3000 each day.
- When renting a car, should I choose to have extra liability insurance?
In order to have additional protection against third-party claims, it is advisable to think about obtaining additional liability insurance if your current policy or the rental company's basic insurance do not offer sufficient liability coverage.