Owning a car is an expensive affair, maintenance, service and cost of spare parts keep on increasing as the vehicle gets older. This is the main reason some people refrain from buying a car. If you are someone who is worried about the costs involved in owning a car, then rental cars might be a perfect solution for you. Nowadays, there are several options to rent a car, and it is fairly inexpensive. You don’t need to worry about maintenance if you rent a car, just fuel up and drive. You can rent a vehicle for a day or even for several months. Ever wondered how insurance with rental cars works? This article will throw light on all the aspects of Rental Car Insurance, along with the most common queries related to car rental insurance.

Insurance for Rental Cars - Acko

How does Rental Car Insurance Work?

Insurance for rental cars is a different ballgame, and it works differently when compared to personal car insurance. Rental car coverage is not as simple as your regular car insurance, the benefits and coverage vary depending on the rental company and geographical location. 

Below are the types of coverages offered in rental car insurance:

  1. Collision Damage Waiver (CDW)

As the name suggests, Collision Damage Waiver will cover you against damages to the car. Note that CDW covers only bodywork damage and it doesn’t cover other parts such as windshield, tyres, battery, interior damage and engine/gearbox. Damages to the car due to reckless driving/driving under the influence of alcohol are also not covered.

  1. Theft Protection

If the rented car gets stolen, then the theft protection cover will make sure that you won’t have to pay any money to the rental company. Theft protection also covers damages to the car that occurs in an attempt of stealing.

  1. Third-Party Liability

The third-party liability car insurance policy will cover damages caused to third-party property/life while driving a rented car. However, if you were found breaking the rules and regulations in such situations, then this coverage will not be applicable.

Significance of Car Rental Insurance Cover:

When you rent out a car, you are responsible for damages caused to the vehicle, and that’s why the car hire insurance cover is such a critical aspect of renting a vehicle. Rental car insurance will cover you against damages, theft and also damages to third-party property/life. Below are the benefits of rental car insurance coverage:

  • Super Collision Damage Waiver (SCDW): CDC only covers damages to the bodywork of the car, while the Super Collision Damage Waiver covers several additional parts of the vehicle. SCDW gives you peace of mind, even if the rental car is damaged very badly.
  • Personal Accident Insurance (PAI): If you or any occupants of the rented car gets injured, the Personal Accident Insurance cover will pay out the medical expenses incurred.
  • Uninsured Motorist Protection (UMP): If you are involved in an accident, and the driver of the other car is not insured, the Uninsured Motorist Protection will cover damages/injuries.
  • Supplemental Liability Insurance (SLI): The Supplemental Liability Insurance will increase the maximum amount paid by Third-Party liability coverage.
  • Roadside Assistance Cover: The RSA (Roadside Assistance) cover will come in handy if the rented car breaks down. You will be assisted if the car runs out of fuel, suffers a puncture or completely breaks down.
  • Full Protection: As the name suggests, it is the combination of all the covers which are mentioned above. It covers damage/theft, repair costs, RSA charges and other costs involved in the process of claim.

Things to check before Buying Insurance for Rental Cars:

  • What is the maximum limit of the collision loss damage insurance?

Usually, it depends on the value of the rented car and the rental company. But if the claim made by the rental company exceeds the coverage offered by the insurer, you might have to pay the exceeding amount.

  • 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.

  • Is rental car insurance a primary or secondary coverage?

Usually, the most common coverage is secondary coverage, and it covers damage and theft. In secondary coverage, the rental company has to apply for a claim with the insurer. Primary coverage is the best option in car rental insurance, and it’s available with credit cards. The claim will be taken care of by the credit card company, and you don’t need to worry about paying for damages.

  • Is the entire car covered under the rental car insurance?

No, the Collision Damage Waiver does not cover the entire car. CDW covers only bodywork of the car, but the Super Collision Damage Waiver will cover some other parts in addition to bodywork.

  • Is Roadside Assistance a standard coverage in rental car insurance?

It depends on the car rental company and the geographical location. Some companies do provide RSA as standard while some companies will offer it as an additional cover.

Grey Areas in Rental Car Insurance:

At first, the car rental insurance might seem pretty straightforward, but there are few loopholes in the system, and the rental companies try to take unfair advantage of those loopholes. In other words, it can be called grey practices or grey areas of rental car insurance. Below are few grey practises in insurance for rental cars:

  • Overpriced CDW Insurance: The Collision Damage Waiver is overpriced, and sometimes it can cost more than the car rental fare. But in reality, it does not cost that much for the rental company, and they will gain huge profits by overpricing the CDW coverage.
  • Paying Up Front for Damages: Usually, the car rental company will ask you to pay a fixed amount as a damage claim at the time of renting a car. In case you return the car with damage, that amount will be deducted. This way you are not aware of the costs involved in handling the damage. In most cases, the rental companies will accept such payments only via credit cards.
  • Additional Charges to fix a Damage: In case you have not purchased CDW coverage, the rental company can charge you more than what is required to fix the damage. Usually, the additional charges will be for towing, excess fee, loss of business or for loss of resale value of the vehicle.

Explore Acko Car Insurance Policy Online & its Benefits:

Buying car insurance at Acko is hassle-free, and it saves you a lot of time and time. Everything is digital, be it purchasing or claims, you just need to log on to the website or download the smartphone app to access insurance services. Below are the benefits of Acko car insurance:

  • Online Process: With zero paperwork, purchasing/renewing or claim is a simple process at Acko. You can also make online payments and can track your claim status on the website.
  • Guidance from Experts: Our team of trained professionals will guide you regarding any queries about car insurance. Acko’s team will also assist you in making claims online, which is a very simple procedure.
  • Easy & Hassle-free Claims: Acko car insurance comes with an easy claim procedure. Just register the claim online, and Acko will pick up your damaged vehicle for repairs. You can track the repairs online, and the vehicle will be delivered to you within 3 days. For minor damages, the claims are settled instantly.

*Note: The vehicle pickup facility is available in select cities. For more details, refer to the claims section.

  • Best Prices: Acko car insurance provides you with best car insurance plans at optimal prices. Acko also suggests you the optimum IDV for your car depending on how old the vehicle is.

Frequently Asked Questions:

By now, you might be well-versed with all the terms involved in the car rental insurance. But if you still have doubts regarding rental car insurance coverage, then you can refer to the common queries given below:

How do I purchase rental insurance?

When you rent a car from any of the reputed companies, they also offer you the rental insurance covers. You can purchase the covers from the rental company depending on how many days you are renting the car. Usually, the coverage is provided by insurance companies.

I am renting a car. Do I need extra insurance?

Yes, if you are renting a car, you need insurance which covers accidental damage. Usually, the car rental company will provide you with an accidental damage coverage policy. On the other hand, if you have personal car insurance with accidental coverage, then it will also extend to the rented car.

Can I rent a car with my personal insurance?

Yes, you can. But you need to have comprehensive insurance which provides liability coverage for your car. This coverage will also extend to the rented car.

Is car rental insurance covered by my credit card?

Usually, a credit card will provide Collision Damage Waiver cover, and some credit cards even cover loss of business and compensate the company for the time the car has been out of operation.

Is collision damage waiver necessary in rental car insurance?

If you already have an insurance/credit card which provides cover against damages for rental cars then CDW cover is not required. But if you don’t have a personal cover, then you might have to buy such rental car cover from the rental company.

Somebody scratched the rental car while it was parked. Does Collision Damage Waiver cover such damages?

Yes, Collision Damage Waiver covers damages to the body of the rented car.

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