Car insurance for rental cars: Do you need extra coverage?

Do you think that getting higher coverage insurance for a rental car you’re only going to use for a week is a waste of money?

It’s time for a serious rethink. When overseas, we tend to be more receptive to getting better car insurance for our rental car, but sometimes, when renting in Singapore, we tend to get complacent since we’re familiar with the roads.

Our congested streets and tight spaces do increase the risk of accidents, especially for rental car drivers who are generally less experienced. So, what sort of car insurance should you be getting for your rental car?

What is the typical car insurance included for rental cars in Singapore?

When renting a car in Singapore, don’t get too caught up doing the administrative work and checking the defects on the car to forget asking about car insurance.

Usually, if you rent from smaller car rental companies over means such as Carousell, you might only have Third Party Fire and Theft car insurance.

Consider getting comprehensive rental car insurance instead, which covers the rental vehicle as well as any injuries you may suffer in the event of a traffic accident.

For established rental companies, rental car insurance can come with four coverage options namely:

1. Collision/Loss Damage Waiver – Covers the damage of the rental vehicle caused by a car accident.

2. Liability Coverage – Provides protection against any potential lawsuit resulting from the car accident.

3. Personal Accident Insurance – Covers the medical expenses incurred from a car accident.

4. Personal Effects Coverage – Covers your belongings which you may keep in the rental car

Is it necessary to buy rental car insurance in Singapore?

If you are renting a car, you do not usually have to purchase additional rental car insurance. This is because the car rental company would have already purchased some rental car insurance before providing the car for rental, even if it is a Third Party Only or Third Party Fire & Theft policy.

To lower the rental car insurance costs however, most car rental companies opt for just the basic collision/loss damage waiver coverage, theft cover (Theft Protection) and third-party cover (Third-Party Liability); without including other benefits which you may need in the event of an accident.

Such basic rental car insurance plans are likely to have a high excess, which the car rental company may impose on you if you damage the vehicle during your rental period. And as the basic damage cover usually only covers the car’s bodywork, you may have to pay through your nose if other parts of the rental car, such as the engine and windows are damaged.

The basic rental car insurance may also only cover the rental car for use locally in Singapore. So if you intend to drive across borders to say, Malaysia or Thailand, you would have to check with your rental car company if the insurance policy included in your package covers overseas usage — it likely doesn’t.

We cannot stress the importance of knowing exactly what the basic insurance plan that comes with your rental car package covers you for. This is so that you can assess whether you need to opt for any insurance add-ons for extra protection or lower your excess.

What happens if you get into an accident with a rental car?

1. Stay calm and ensure everyone’s safety

In the aftermath of a car crash, the most important thing is to not panic. Calm yourself down and try to think with a clear head.

Check if you are okay, then look at the other people around you to ensure that no one is in a dire, life-threatening situation. Get everyone to safety — to the road shoulder or to a safe patch, off the road. Put up hazard lights to warn other cars.

2. Report the accident to your car rental company

At this point, it is crucial that you do not move your rental car out of position, even if it is blocking traffic. Instead, if you are calm and safe, call your car rental company to inform them about the accident.

3. Take photos of car damage and injury

Have a look at your rental car and assess its damages. Start taking as many photos as you can of your car, the scene of the accident (lane markings, skid marks and any debris nearby) as well as the other vehicles involved. Snap the shots from a variety of angles and positions to provide a fuller context of what happened. Don’t forget to take photos of the license plates of all the vehicles involved.

4. Exchange particulars with the driver(s) involved

Some experts recommend not settling matters with the other driver(s) involved at the scene in the heat of the moment. Instead, exchange particulars so that you can discuss the matter in a calmer setting if necessary.

The information you should get includes the other driver’s full name, NRIC number, contact number, home address as well as the name of their insurer.

Do note that you could meet a difficult driver who refuses to give you their particulars. In this case, the photos of their license plate numbers should come in handy.

If there are witnesses, get their particulars too if they are willing to vouch for you.

5. Wait for help

Once you have contacted your car rental company, they will send down their operations team to the site of the accident to assist and advise you.

And as per your rental contract, your car rental company will generally handle the towing away of your damaged rental car, its servicing as well as the insurance claims process.

6. Submit evidence

Send the photos you’ve taken of your damaged rental car and scene of the accident to your car rental company as well as the third party contact you’ve been given by the other driver(s) involved in the accident. This will help kickstart the insurance claims process.

No car insurance policy is necessarily bad, but as a driver, make sure you know what insurance coverage is included. And, always keep the important contact numbers on hand so that you know who to call during a car accident.