At first glance , buying insurance to lose a rental car is indeed an option for car owners because they have to provide more capital to pay premiums.
If you are still in doubt, here is a list of reasons why rental car insurance is important.
1. Can’t control the tenant when using the car
In running a rental car business, you will be lending your assets to a variety of different people. Well, you never know what the character of that person is, and whether he is disciplined in driving your car.
Therefore, you can’t control and predict how the condition of the car when it is returned.
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2. There are other risks beyond the carelessness of drivers and renters
Even though you have selected the tenants very strictly, there is still a risk of an accident due to the carelessness of others, thereby damaging your car. In addition, the possibility of natural disasters is also inevitable.
3. Rental car insurance premiums are lower than the risk of loss
Usually, the annual premium for car insurance is not up to 5 percent of the price of the car! So instead of going out big for repairs, or even buying a replacement car, it’s better to set aside a little money to pay premiums.
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Based on data from the Central Statistics Agency (BPS), the number of motor vehicle thefts in 2018 reached 27,731 cases throughout Indonesia. The majority of these cases occurred in West Java with 5,234 cases, followed by North Sumatra with 4,726 cases.
The figure describes cases of theft without coercion. That is, the perpetrators carry out their actions secretly. Incidents like this are actually very vulnerable in the rental car business.
Not only because of the intention of the perpetrator but also from the negligence of the tenant. Tenants feel that what they are driving is not private property, so they are often not very disciplined in maintaining it.
It could be that they forgot to lock the vehicle or parked it in any place that caused the car to disappear.
Not only losing a car, the potential for road accidents is also quite high in Indonesia. Police data says that in 2019 there were 107,500 traffic accidents, an increase of 3 percent from 2018.
This is in line with BPS data for the period 2014-2018 which increased by an average of 3.3 percent per year.
Actually cases like this have been regulated in Article 1564 of the Civil Code. The article states that the renter must be responsible if it causes damage or loss of the rental car, unless the incident occurs outside of his fault.
However, what if it turns out that the damage or loss is proven not to be the fault of the tenant? You are forced as a rental provider to bear the cost of repairs that are not small.
What are the tips for choosing rental car insurance?
Before buying rental car insurance, there are several things you should pay attention to, namely how to choose the type of product and the type of coverage.
1. Choose the type of product specifically for rental cars
Generally, two-purpose car insurance. The first is for private cars and the second is for commercial cars, meaning cars that are operated for business activities.
You should choose car insurance or commercial motor vehicles. Because car rental is included in business activities.
However, not all insurance companies directly classify it. Some sell no-frills car insurance policies. So you have to ask clearly to the agent or broker, can your target product actually cover insurance for business activities?
You should also report in advance if the insured car is used for business activities. So that there will be no problems in submitting claims later.
2. Choose the appropriate type of coverage
You may be wondering, insurance for rental cars, is it TLO or All Risk? The answer depends on your needs.
For information, there are two types of car insurance offered in the market, namely All Risk (Comprehensive) and Total Loss Only (TLO). The difference between the two is in the coverage, namely All Risk will cover all losses on the car while TLO will only disburse claims for loss or serious damage.
Select which one? Of course it depends on your priorities. If you are after a cheap premium, then TLO is the answer. Unfortunately TLO insurance will not provide compensation if the damage to your car is just a scratch or a little dent.
Meanwhile, comprehensive protection is provided by All Risk insurance. This type will compensate for any loss, even if it’s just a scratch. Consequently, you have to pay a higher premium.
The best rental car insurance
There are many providers of car insurance products in Indonesia. So the question is, do you need car insurance or not ? Find out the benefits of having car insurance in the following reviews.
1. ACA car insurance
ACA offers a Comprehensive (All Risk) policy that is suitable for car rental because of its comprehensive protection. In addition, this insurance company with 64 years of experience has partner workshops spread throughout Indonesia, plus emergency repair services, tow trucks, and ambulances for ACA motor vehicle insurance customers .
2. MSIG car insurance
MSIG provides motor vehicle insurance for commercial use in the form of All Risk and TLO. In addition to physical damage, third party guarantees are included in the basic guarantee of All Risk products, you know! If it’s still not enough, you can also add an expansion for passenger accidents and losses due to riots.
3. Astra Buana car insurance
Astra Buana does have a special insurance product for commercial vehicles, under the name Commercial Motor Vehicle Insurance. This subsidiary of the Astra International group offers All Risk and TLO protection coverage.
If you want to add natural disaster coverage, Astra Buana also provides extensions for natural disasters, riots, personal accidents, to third party legal liability.
Interestingly, this vehicle insurance has 24-hour service facilities through applications such as Garda Mobile, Garda Mobile, Garda Center, Garda Siaga Emergency Roadside Assistance (ERA), and Garda Access.
Make sure you manage your finances well so that they are not wasteful and are protected with car insurance so you don’t have to worry about the high cost of servicing and repairs because there is insurance that covers it. You can also get compensation if your car is stolen thanks to TLO car insurance.
However, it is necessary to pay attention to the things that cause rental car insurance claims to be rejected
There are many cases of claims being rejected because they do not meet the requirements. One of them, because the insurance policy you choose is not for a commercial car, you can’t claim it.
So, you should report first or buy a car insurance product that is designed for business. However, of course the premiums charged will be more expensive than private car insurance.
