Global insurance companies in Australia have the major car rental giants in their sights as they continue to make inroads into the car rental insurance monopoly or Collision Damage Waiver (CDW) as it is called in the industry.
Companies like Allianz Global Assistance, AXA, Chubb and QBE are partnering with next generation startups that allow consumers to conveniently insure their rental cars at a fraction of the cost of the rental companies.
The typical CDW with one of the major rental brands would cost between $30-40 per day, which sometimes is as expensive as the rental itself. In comparison startups like Tripcover.me offer car rental insurance, on any device, for as low as $7 per day, over a week long rental.
In Tripcover’s case, the insurance product is provided by Allianz Global Assistance, who is also active in nearly 40 countries selling a similar rental car insurance product.
"People are making the switch," says Desmond Sherlock, co-founder and GM of Tripcover, which was the first company to create this category in Australia, at the start of 2012. "It was a no brainer, really. We approached Allianz Global Assistance in 2011 with the idea, knowing that it was a thriving category in the UK, and although it started slow we are now seeing a doubling of customers year on year.”
Several other sites have followed Tripcover.me’s lead into the market, such as Hiccup and RentalCover, who are helping to grow awareness in the market category among renters.
The policy acts just like a typical insurance product. When damage happens to the rental car, the customer will be refunded within 10 working days, up to the insured amount and provided the rental was driven within the terms and conditions.
Sherlock went on to say "customer reviews have been great for business, with a number of customers praising the no hassle claims process, and many others enjoying the convenience of purchasing the policy just before drive out of the rental car depot!”
Continued growth in the category will put additional pressure of the $1.2Billion rental car industry in Australia, given speculation that up to 20% ($220M) of Rental Company revenues are derived from Collision Damage Waiver products.
One thing seems pretty clear from the feedback that we have received so far, that car rental consumers are fed up paying the large fees that the rental companies charge, and with big insurers supporting the startups, this insurance option doesn’t seem like it will go away anytime soon.
Tripcover’s cause is to offer car rental customers the peace of mind that comes with having their car rental excess covered and not costing an arm and a leg.
Working with Allianz Global Assistance, we have used our combined experience in the car rental industry and travel insurance sector, to produce this car rental excess cover in the Australian market.
P: des.sherlock1 (skype)