Gaining Insurance Replacement Business

Photo courtesy of iStockphoto.com/Sumbul
Photo courtesy of iStockphoto.com/Sumbul

As a car rental operator — or any solvent business owner — you need to be on a constant hunt for new revenue streams. If you’re an off-airport car rental operator, you’ve most likely considered the insurance replacement market, but dismissed it due to the dominance of one major brand. You are correct; Enterprise Rent-A-Car does dominate the market, and Hertz is making inroads. But that doesn’t mean you can’t gain revenue from this business segment.

Auto Rental News spoke with two car rental companies that have successfully exploited the insurance replacement market for their thoughts on breaking in. We also gained perspectives from two insurance agents and a body shop operations manager with firsthand experience in this niche of the business.

UNDERSTANDING THE PROCESS

The first step is to understand the insurance claims process, which does not always happen the same way.

When an insurance client gets into an accident, the insured has two options. One is to generate the claim directly through the insurance company’s centralized claims center, where a claims adjuster will open the file. The adjuster will direct the insured to a preferred local collision center and can also set up the rental immediately and electronically with the preferred car rental provider, a national brand. When the client gets to the collision center, he or she will likely find a rental office conveniently located on-site.

The other option is for insurance clients to go through their insurance agent to file a claim. In this case, the insurance agent might similarly direct the client to one of the larger collision centers and thus a national car rental brand. Or the agent might instead offer a local, family-owned body shop to the claimant. In either case, the agent could choose to recommend an independent car rental company that he or she — or the body shop — has a relationship with.

In any of these permutations, the claimant has every right to choose a body shop and a car rental provider, though it’s easy to see how the transaction, being handled smoothly by a third party, would deter them from doing so. And the insurance companies are happy with the system.

“As long as insurance companies are getting what they need from the contractually set rates, ease of reservations and ease of the direct billing, they have no incentive to change that standard procedure and take on the hassles of establishing relationships with more [car rental] providers,” says Brady Krueger, who is not only the co-owner of a property and casualty insurance firm; he’s also a Hertz Local Edition operator.

“We insurance agents like the current arrangements as well,” Krueger continues. “We still get involved in a lot of our auto claims for one reason or another, but not having to deal with any one particular part because it’s already taken care of saves us time and allows us to concentrate on more lucrative things.”

CONTINUED:  Gaining Insurance Replacement Business
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