Lack of Insurance hinders local private car rentals

With strict bank loan rules and sky high COE prices, many are turning to car sharing as an alternative to car ownership. Of course, car sharing seems to be a great idea, and for most part it is. Except for one thing- insuring your vehicle during the rental period. The Straits Times has reported that none of the major insurance companies offer private-rental coverage. Without proper insurance coverage, should the car get involved in an accident, the owner would incur a large repair bill, and the cost would be even higher if someone was to get seriously injured. A normal motor insurance policy does not cover rentals, and it is up to every individual to check with their insurers to see if they cover the car when the car is privately leased.

OneShift Editorial Team

03 Apr 2013

Of course, despite the increase in car sharing, Mr Peh Chee Keong, Vice-President and head of motor insurance from NTUC Income, has said that there still isn’t enough demand to make a short-term plan worthwhile. Another Senior Executive in the same industry has said that they are unwilling to cover individual car rentals as individuals often lack resources and tools to prevent high risk drivers from loaning their cars.

Last month, Transport Minister Lui Tuck Yew announced in Parliament that the LTA has been studying various ways and means to improve current private car rental scheme and make it less strict. They hope that the revisions would make car sharing more accessible.

A new local startup, iCarsclub, looks to be changing that. They have teamed up with online insurance company DirectAsia.com, which provides the coverage that the hirer pays. Each member of iCarsclub is required to undergo two stringent screening processes, including once by DirectAsia.com. The minimum age requirement for a hirer is 25 and he/she must have a driver's license that is valid for at least two years, with no more than six demerit points incurred.

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