You’ve picked up your car, and you’re ready to start your car rental journey. Of course, the last thing on your mind is, whether or not you have bought car insurance for your trip. The purpose of a car insurance is to cover the rental vehicle in the event of a car accident. Generally, the car rental company purchases car rental insurance before putting the vehicle up for rent. Having questions about car rental insurance? Fret not! We have come up with a quick Q&A to address all your burning questions pertaining to car rental services and the insurances that have you covered.
Can I rent a car without buying a car insurance beforehand?
Definitely, all car rental companies are required to take up car insurance, be it the comprehensive coverage, Third Party Only car insurance or the Third Part, Fire and Theft Car Insurance. Therefore, there is no need for you to get car insurance beforehand as it comes with the car rental package plan.
What happens when I damage my rental car?
Without insurance – Simple: You are to bear the full cost of the damages to the rental car.
However, with insurance – Depending on what the car insurance covers, the excess/deductible varies.
What do the different rental car insurance coverages entails:
In Singapore, there are three types of car insurances:
- Comprehensive Car Insurance. As the name suggests, this car insurance covers almost everything – from injury to other parties, medical costs of the accident, damages of property of others, accidents, fire and theft of the vehicle.
- Third Party Only (TPO) car insurance. This insurance covers the damages to OTHER people, vehicles and their property in the event of a car accident that is deemed the hirer’s fault. It does not include coverage for damages of Hirer’s car, or any injuries suffered by the Hirer.
- Third Party, Fire & Theft Car Insurance. This is an upgraded version of the TPO car insurance. Add-Ons that are covered include loss, theft and fire damage to your rental car. Again, this policy does not include coverage for damages of Hirer’s car, or any injuries suffered by the Hirer.
Personal accident coverages are not included, but hirers may request for it as an add-on service.
What do you need to take note of when looking at the car insurance policy terms and conditions?
- How much are you covered for third-party liability and property damage
- What damages does the car insurance cover: Does it cover car bodyworks, engine, interior damages?
Does the car insurance cover the rental car within and outside of Singapore?
Car insurance covers the rental car only in Singapore. Check with your car rental company with regards to whether overseas usage is included in the car insurance if you are travelling overseas (i.e. Malaysia).
How do I claim car insurance for my rental car?
In the event of an accident, please check out our previous article on “What Should You Do If You Get Into A Car Accident While On Car Rental in Singapore?” on a comprehensive step-by-step process.
TL;DR? Here is the summary:
- Collect evidence of the scene – pictures and videos are useful. Gather documents like medical certificates, bills, and other financial expenses.
- Insurers require you to report any accidents within 24 hours of the accident or by the next working day. Otherwise, the insurer may reject any claims arising from the accident and the Hirer may be fully liable for any damages that arose as a consequence of the accident.
- If necessary, bring your car to an authorized workshop.
I keep seeing the word ‘excess’ in the insurance package.
What is ‘excess’ and what does it mean?
Car rental insurances do come with their limitations. Excess is the amount that you (the hirer) is liable to pay in the event of an accident or if the rental car is damaged.
It is the first amount of claim which the insured person (you) have to bear. This ensures that only the major claims are made known to the insurance companies. E.g. if the excess is $1500, you can only make a claim if you had to pay an initial amount of more than $1500. If the repair costs $800, you have to pay the full $800 as the insurance company is not going to pay for anything below $1500. If your repair cost is $2000, you pay $1500 and the insurance company pays the remaining $500.
- For most car insurance policies, the excess is divided into different sections; Section 1 and Section 2.
- Section 1 covers your own damage: If the rental car is damaged, the insurance company would pay for the repair cost that exceeds your excess, regardless of who is at fault. E.g. If the excess is $1500, and the cost of the damage is $2000, the insurance company would have to pay $500 while you pay $1500.
- Section 2 covers third party claims. If the rental car is damaged due to an accident, the insurance company will pay for the repair cost exceeding your excess.
- Excess: Section 1 and Section 2 separately. This means that you would have to pay for both your own damages and third party claims. E.g. if your excess is $1500: it means that you might have to pay up to $1500 for rental car damages, and another $1500 worth of third party claims, before the insurance kicks in.
What does BizLink Rent-A-Car Offer?
BizLink’s Tip: Comprehensive car rental insurances are provided for all vehicles at car rental companies like BizLink Rent-A-Car when you book your rented car with us. Should you require a fully comprehensive personal accident coverage and other add-ons, please make a request for it from our friendly sales associates as we do offer optional insurances such as the Personal Accident Insurance (PAI) at S$80.00/driver/month (exclusive of GST). Should you have any questions regarding our car rental insurance policies, feel free to contact our sales associates and they will be happy to assist your every need.
*This article is written on 1st February 2021 and is accurate at the point of publishing. For the latest information, please contact BizLink Rent-A-Car and we would be happy to assist you.