Car Rental Insurance
Russel Michaels of the Financial Services Board in Pretoria has just informed Insurance Times & Investments that the authorities are launching an investigation into the car rental industry.
He says there is a clear case for investigating various practices that have developed in the industry over recent years, especially concerning the question posed by Insurance Times & Investments in its July cover story: Are Car Rental Companies really Selling Insurance?
The FSB has still to draw up a detailed brief for its work. But it is evident at this stage that the practice of charging daily rates for collision damage and theft waivers will be a central part of the investigation. The costs, referred to by most booking clerks as “insurance”, make up as much as 50% of the total initial hiring fee.
The authorities need to establish at least whether insurance business is actually being conducted. And in any case, why are the rates so high?
Meanwhile, we urge registered short term insurance companies to consider seriously the question of offering some form of rider benefit to existing client’s motor insurance policies that afford them the necessary cover in the event they hire a rental car.
After all, an insured can hardly drive two cars at the same time, and in any case will often rent a vehicle of lower value. Furthermore, it makes good underwriting sense because the insured already has a proven motor insurance claims record and driving ability.
The only reason a short term insurer might baulk at the idea is if the underwriter thinks his policyholders turn into maniacs when they get behind the wheel of a rental car.
That is very unlikely; he just has to check the very low claims experiences of the car rental companies.
Article from an insurance magazine
Make sure that you know which insurance you are taking. visit www.southafrica-carhire.com for great rates with full insurance.
He says there is a clear case for investigating various practices that have developed in the industry over recent years, especially concerning the question posed by Insurance Times & Investments in its July cover story: Are Car Rental Companies really Selling Insurance?
The FSB has still to draw up a detailed brief for its work. But it is evident at this stage that the practice of charging daily rates for collision damage and theft waivers will be a central part of the investigation. The costs, referred to by most booking clerks as “insurance”, make up as much as 50% of the total initial hiring fee.
The authorities need to establish at least whether insurance business is actually being conducted. And in any case, why are the rates so high?
Meanwhile, we urge registered short term insurance companies to consider seriously the question of offering some form of rider benefit to existing client’s motor insurance policies that afford them the necessary cover in the event they hire a rental car.
After all, an insured can hardly drive two cars at the same time, and in any case will often rent a vehicle of lower value. Furthermore, it makes good underwriting sense because the insured already has a proven motor insurance claims record and driving ability.
The only reason a short term insurer might baulk at the idea is if the underwriter thinks his policyholders turn into maniacs when they get behind the wheel of a rental car.
That is very unlikely; he just has to check the very low claims experiences of the car rental companies.
Article from an insurance magazine
Make sure that you know which insurance you are taking. visit www.southafrica-carhire.com for great rates with full insurance.
Labels: South Africa - Car Hire
