Vehicle insurance for Car Rental: What are the terms and Conditions?

Vehicle insurance for Car Rental: What are the terms and Conditions?
Vehicle insurance for Car Rental: What are the terms and Conditions?

Vehicle insurance is one of the important things for car owners, especially if the car is used for rental business.

By having insurance, car owners can transfer the risk of damage, accidents, or theft that may occur when the car is rented to the insurance.

However, not all vehicle insurance is suitable for rental cars. There are several things to consider before choosing the right insurance.

Types of vehicle insurance for Rental cars
In general, there are two types of vehicle insurance offered by insurance companies, namely All Risk Insurance and Total Loss only (TLO) insurance. All Risk insurance will cover all damage caused to the car, both light and heavy, due to accidents, theft, natural disasters, or criminal acts.

While TLO insurance will only cover damage that exceeds 75% of the price of the car or if the car is lost altogether.

For car rental businesses, all Risk insurance is more recommended because the protection is more comprehensive and can cover various risks that may occur when the car is rented.

However, all Risk insurance premiums are also more expensive than TLO insurance. Therefore, car owners should consider their financial capabilities and the level of risk faced before choosing the type of insurance.

In addition, there are also several extensions of protection that can be added to a vehicle insurance policy for rental cars, such as:

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– Legal protection. In the event of a legal dispute due to an accident or a claim from a third party, the insurer will help handle the legal process and costs incurred.
– Earthquake and flood protection. If the car is damaged by a natural disaster such as an earthquake or flood, the insurance will cover the cost of repairing or replacing the car.
– Terrorism and sabotage protection. If the car is damaged as a result of an act of terrorism or sabotage, the insurer will cover the cost of repairing or replacing the car.
– Additional accessories protection. If the car has additional accessories such as audio, video, GPS, or parking cameras, the insurance will cover the cost of repairing or replacing these accessories if damaged or lost.

Terms and Conditions of vehicle insurance for Rental cars

Each insurance company has different terms and conditions to provide protection to rental cars. However, in general, there are some terms and conditions that are commonly applied, such as:

– The car must be used in accordance with commercial purposes. The car owner must certify that the car is being used for a rental business and not for personal or other purposes.
– The car must be in good condition and roadworthy. Car owners must maintain the condition of the car to keep it good and roadworthy in accordance with traffic safety standards.
– The car must have complete and valid papers. Car owners must have papers such as vehicle registration, BPKB, driver’S license, and other documents related to the ownership and use of the car.
– The car must be insured according to market value. The car owner must set the insured amount in accordance with the current market value of the car. If the value of coverage is too low or too high, the insurer may reject the claim or provide compensation that is not appropriate.
– The car must be rented to a person who has a driver’S license and is at least 21 years old. The car owner must ensure that the car renter has a driver’S license that matches the type of car and is at least 21 years old. Otherwise, the insurer may reject the claim or provide inappropriate compensation.

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How to claim vehicle insurance for Rental cars

In the event of damage, accident or theft to the rental car, the car owner must immediately report the incident to the insurer and follow the applicable claims procedures. In general, there are several steps to take, such as:

– Contact the insurance. The car owner must contact the insurer by phone, email, or online application and notify the incident experienced. The insurer will provide a report number and further instructions.
– Collect supporting documents. The car owner must collect supporting documents such as car papers, driver’S License, ID card, proof of rental, proof of premium payment, photos of damage or loss of the car, a certificate from the police, and other documents requested by the insurance.
– Submit supporting documents. The car owner must submit supporting documents to the insurer through the branch office, email, or online application in accordance with the instructions provided.
– Waiting for verification process. The insurance company will carry out a verification process for supporting documents and events experienced. This process can take several days or weeks depending on the complexity of the case.
– Receive claim results. If the claim is approved, the insurer will provide compensation in accordance with the value of the coverage and the type of damage or loss. If the claim is rejected, the insurer will provide the reason for the refusal and the right of appeal if any.

Vehicle insurance for Car Rental: What are the terms and Conditions?

Thus the article about vehicle insurance for car rental: What are the terms and conditions? Hopefully this article is useful for those of you who are running a car rental business or plan to do so. Don’t forget to always choose vehicle insurance that suits your needs and capabilities.

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