Insurance in Car Rental Industry
15 Jan 2016
When we stand at the counter of car rental company, one of the most asked question is whether we want to purchase the insurance. Some people don’t want to pay for the insurance, so they can save money. Before making the decision, we should completely understand what kind of coverage that we should get. It is essential for car rental companies to encourage consumers to purchase the insurance. But it is also important for car rental companies to purchase their own insurance policy for specific purposes. Car that’s not rented still lose its value, but the loss of value will be faster when it is used more often.
In this case, car rental companies should be able to prove loss values with the fleet utilization log. This indicates the amount of financial damage. The insurance company will cover a portion of the amount. If we waive the coverage, we will be responsible for the entire loss of value. Diminution of value is another factor that we need to consider. Accidents no matter how small it is can reduce the overall car value. The lost of value will be passed to the next car owner. Car insurance company will pay for a part of the car damage if it is found as reasonable.
Car rental companies will also need deal with administrative fees and this will be added to the rental costs. The depreciation in value is something that car rental companies need to be aware of. Car should become a tool that can provide significant profit, before it is deemed unusable due to complete loss of values. Maintaining cars can also be quite expensive and it is important that the car is properly protected. Insurers will never pay the whole amount of money we lose through various factors, but with the amount of money we get; we should still be able to make sure that the car can become more profitable.
There are a number of waivers that are related car rental companies:
- Collision damage waiver: With this kind o waiver, the insured individual will not be held liable for any unintentional damages inflicted on the car. It means that the insurer will pay the whole amount or much of the repair costs.
- Theft liability waiver: Rental car can also be stolen, both while being rented or parked in company’s facility. The waiver will protect both renter and car rental company if reasonable security measures have been taken.
- Personal accident insurance: Medical expenses and accidental deaths can be inflicted to drivers and car rental employees who act as the driver for renter. This policy can be identical to standard personal accident coverage, but it is adapted for the car rental purposes.
- Liability insurance: The liability coverage will pay for damages if anyone in the car is injured during an insurable incident. This coverage can be similar to bodily injury liability coverage.
With proper protection, anyone in the company should get appropriate benefits.