If you own a car, you can earn extra cash by renting it out when you are not using it. The best way to do that is by listing it with companies that allow you to rent out your vehicle to other local drivers who need transportation. Although this can make you good money, it also comes with its fair part of risks. Your vehicle may be involved in an accident or even stolen when it is hired out. Unfortunately, your car insurance may object to cover car sharing because you're using your vehicle to make money. Also, your insurer will not know who was driving your car and how safe they are behind the wheel. That is why car hire insurance is recommendable.
Such insurance covers your vehicle in case renters crash it, causes damages to someone else or if it is stolen from them. This article will discuss the type of insurance coverage you will need before you rent out your car.
Different Rental car insurance options
Am I covered? This is the first question many car owners often ask before they rent out cars. That is why before you list your vehicle with a car hire company, you should carefully look over their insurance policy to ensure your vehicle is covered in case of an emergency or accident. Otherwise, you may end up paying much for repair cost and other problems.
Below are the three leading insurance options that car rental companies offer.
Liability insurance coverage
Third-party liability coverage is one of the insurances covers you will need before you rent out your car. In most countries, liability coverage is compulsory on every vehicle on the road. It provides coverage for any injuries or damages you cause to a third party if you are responsible for an accident.
When the driver hiring your car causes an accident, they will be liable for the cost of damages caused on the third party's property, the cost of damages and injuries on the person, as well as the third-party legal costs and disbursements. These costs can be prohibitive, but with liability insurance coverage, it will pay for them.
Collision damage waiver insurance
Another essential insurance option you will need before you rent out your car is the collision damage waiver. This policy offered by car rental companies covers costs involved in case your vehicle is stolen or damaged when on hire.
In this case, the rental company will be liable for any damage to your car as it is the insurance holder. But they have a right to pass this liability on any driver who rents your vehicle, but they waive it. However, this cover does not cover all repair costs. The driver renting the car is liable for paying for any excess charges. To avoid paying extra charges for damages, it is a good idea for a renter to purchase a car hire excess insurance.
Personal Accident coverage
Personal accident coverage is also essential before renting out your car. This type of insurance covers the renter and any passengers in the vehicle if an accident occurs. The policy covers medical bills and other associated costs after the occurrence of an accident.
Conclusion
Nowadays, many car owners are renting out their cars when they are not using them. That enables them to earn reasonable amounts of money. However, before you rent out your car, it is good to ensure you purchase a liability insurance cover, loss damage waiver and personal accident insurance. Such insurance policies will get your vehicle covered in case of an accident resulting in damages or injuries.