Car rentals: ‘buy down’ your excess for less

By Georgina Crouth Time of article published Sep 12, 2019

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Despite the onslaught of ride-sharing apps such as Uber and Bolt, many people still opt for car rental. Self-driving is probably the safer option, considering how commonplace bad driving, crashes and attacks on passengers using such platforms have become.

But the drawbacks of renting a car are many and can be expensive.

Customers are imperilled even before they get in the driver’s seat: if they haven’t conducted inspections - scrupulously and in a well-lit area or the light of day - taken photographs of existing damage and noted those on the damage check sheet before they drive away, they can be held liable for someone else’s mishaps, no matter how insignificant that chip, bump, scratch, scrape, gouge or rim damage might appear.

If you’re late, or just careless, and decide to just “drop and run”, rather than conduct a proper inspection in the presence of a rental staffer, that will bite you in the bum because the company is likely to charge whatever isn’t on that check sheet (even damage that should count as fair wear and tear) to your credit card. And you would have no room to argue.

Not technically insurance

Car rental companies are “self-insured”, so they share some liability with their clients. Clients not only pay deposits on the vehicles they take, but they’re also required to take insurance waivers. Ordinarily, they’re offered standard, or expensive “super” waivers, which means they pay less in the event of a crash or theft. And if they opt for that cheaper standard waiver, they could be liable for tens of thousands of rands if they crash, the car is stolen or otherwise damaged - and lose their deposit.

But now, clients can now get insurance cover on their excess. With CarSure, underwritten by Guardrisk, you can “buy down” the excess for a small, once-off premium.

Last week, CarSure and Root, a fintech company, launched the country’s first WhatsApp-based insurance bot.

Root’s operations manager, Dewald Müller, explains: “Normally, the car rental company has a basic excess built in. And if you want to buy down that excess, it comes at a huge cost. This policy is affordable - if you have a R3500 excess, the premium is about R35 a day - dependent on the rental period.”

CarSure is one of the first products to be run on the Root operating system and because of its relationship with the fintech company, it was able to launch the new product in record time. Before launching the WhatsApp bot, the only way to access the insurance product was through a call centre, which would then issue the policy. And not many people knew about it.

“There was too much friction in the application process,” Müller says. “Last year, WhatsApp opened its APIs (application programming interface, which allows software systems to “speak” to each other) and we realised this would allow us to bring the product closer to the user.”

Since car rental insurance is an on-demand product and not needed often, downloading apps is not an option - plus there’s “app fatigue”.

Müller says clients are unlikely to store apps they hardly use, but WhatsApp is a fixture on most devices.

“With Whatsapp, it’s as close to the customer as possible and personalised. It’s easy to understand, personalised, and it takes three questions, or a minute and a half, to issue a policy. It also allows the insurer to access a wider target market.”

To sign up, customers save CarSure’s number on their phones and initiate the conversation. “You reach out to CarSure and the bot starts the chat on WhatsApp. The first time you engage with it, it will ask personal info like ID number, name, etc. WhatsApp is encrypted and Root has various levels of security so your information is safe. Once you send that info, it will store it on your profile. So you never need to repeat that process.”

The bot will ask you about the rental period, when you’re returning the vehicle and what the excess is and provide a premium.

It gives a breakdown of the costs, lists exclusions such as windscreens, tyres, wheels, rims and wheel accessories, with a hyperlink to the policy wording and whether you’d like to proceed. If you agree, the bot directs you to a payment link, where you provide your credit card details.

When the client is involved in an “incident”, they contact the rental agency and follow their instructions - the deposit is already held by the company, but the client gets to claim back the excess from CarSure, which reimburses within 48 hours.

Fine print

The insurance doesn’t cover everything, and clients need to familiarise themselves with the terms of their rental contract. These are likely to be driving under the influence, off-road driving and not reporting crashes or theft timeously.


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