How Does Comprehensive Car Insurance Works For Rental Cars?
Updated On Oct 15, 2023
A rental car is a good option for people who can not 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.
When it comes to purchasing a car, it is certainly a costly affair that everybody can not afford. Apart from investing a hefty amount, owning a car brings maintenance expenses with it as well. It is the major cause due to which many people abstain from purchasing a car. However, keeping all these factors in mind, the rental car is a good option for many people.
Lately, various firms have come up to offer rental cars under which the customer will just have to fuel up the car and drive without worrying about its maintenance. 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.
How Does Comprehensive Car Insurance Works for Rental Cars?
Just like personal car owners, every rental car rider also needs to own car insurance while driving. However, rental car insurance works in a different manner when compared to car insurance for personal cars. The coverage and benefits of rental car insurance may vary from rental company to rental company as well as from geographical location to geographical location. Here are a few types of insurance coverages under the rental car insurance:
1. Third Party Liability
As the name suggests, the third party liability car insurance plan is designed to cover the expenses of damages incurred by the third party in terms of property loss, injuries or death due to an accident or mishap with the involvement of the rented car. But, if the driver of the rented car is found violating the traffic rules which led the accident to happen, in such cases, the third party liability coverage will not be applicable.
2. Collision Damage Waiver (CDW)
The Collision Damage Waiver is meant to offer compensation against damages sustained by the rental car. This insurance cover will only provide coverage for bodywork damage and offers no coverage for other car parts like interior damage, windshield, battery, engine, gearbox and tyres. If the damages sustained by the car are caused due to reckless driving or driving under the influence of alcohol, then no damages will be covered under this cover.
3. Theft Protection
The Theft Protection cover ensures that you do not have to pay any amount of money to the car rental firm in case the rented car gets stolen. Even if the car could not be stolen, this insurance cover gives compensation for the damages incurred by the car which occurs in the attempt to steal the car. It provides huge protection and relief to a customer of a rented car.
Importance of Car Rental Insurance Cover
When someone takes a car on rent to drive, it might refrain them to purchase a new car, but responsibility for damages sustained by the car could not be avoided. Hence, owning a comprehensive car insurance plan to cover a rented car is a must for all the rented car users. 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:
- Supplemental Liability Insurance (SLI): Supplemental Liability Insurance is an insurance cover which enhances the maximum coverage to be paid for the Third-Party liability cover.
- Personal Accident Insurance (PAI): If the rented car user or any other occupant of the rented car suffered any injury caused due to an accident or mishap, then the Personal Accident Insurance cover will make the payment for the incurred medical expenses.
- Super Collision Damage Waiver (SCDW): When it comes to Collision Damage Waiver, it offers coverage against damages sustained by the bodywork of the car, on the other hand, the Super Collision Damage Waiver offers coverage to various additional parts of the rented car. The latter provides complete coverage even if the car is badly damaged.
- Uninsured Motorist Protection (UMP): If the driver of the other car does not hold any insurance and is unable to pay for the damages sustained by the rental car or its user, in such a situation, this Uninsured Motorist Protection cover will pay for the damages and/or injuries sustained.
- Roadside Assistance Cover (RSA): 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 breaks down completely in the middle of the street.
To enjoy the ride of a rental car to the fullest, owning a comprehensive insurance cover is highly recommended. It gives full protection to the rented car with all the insurance covers that are mentioned-above from car damage, car theft, car’s repair costs, roadside assistance charges and various other costs which are involved in the procedure of the car insurance claim.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.