Dutch car sharing platforms tackle insurance fraud
Dutch car sharing platforms have noticed that a new type of fraud is increasing: people try to claim already existing damage on their car with the insurance company by renting it to a friend who ‘admits’ he was responsible for the damage during the renting period.
Last month car sharing platform SnappCar, together with insurance company Allianz, took a rigorous decision: anyone lending out a car older than ten years only gets a maximum of 750 euro, or in some cases 1.250 euro, even when a shiny eleven year old car is completely smashed up.
Other insurance companies have noticed the same tendency and also consider stricter conditions, by pulling up the excess fee, for instance. Also SnappCar has doubled this excess fee for own risk.
When renting for the first time, people will have to pay the first 500 euro themselves in case of a damage claim, as the company has noticed that people renting for the first time are the most likely to claim damage.
‘Airbnb for cars’
SnappCar started as a small-scale platform in Utrecht (Netherlands), on which private individuals could lend out insured cars to each other, like a kind of Airbnb for cars. In the meantime the company is working internationally and has 250.000 members worldwide. When a sector grows, also fraud does, even on a larger scale.
In 2017 the car insurance was the insurance where most fraud was registered, and according to the centre for control of insurance criminality (Centrum Bestrijding Verzekeringscriminaliteit) the number of fraud cases last year went up with 14%.
In the meantime private individuals are becoming less inclined to lend out their cars, knowing that – in case of damage – only a small amount of the real value will be compensated. Some are willing to pay for a better insurance formula, but that option isn’t available.
“A pity”, says Dennis van Holland, who already lends out his twelve-year-old Jaguar XJ for several years, often for marriages. “By harming the owner’s interests, there will be fewer cars available on the platform. I think it would be better to control who’s renting a car.”
Some platforms are working on another evolution: a combination of leasing and renting. Individuals can ask SnappCar or MyWheels to ‘manage’ a car end then rent it to others. People willing to lend out their cars several times a month then can lease a car for 99 euro a month.
“In that case, damage gets a different perspective and platforms deal differently with damage of leasing cars”, says MyWheels’ CEO Karina Tiekstra. “People lending out their own car tend to claim the smallest damage, but with a leasing car the company decides how to solve problems. By leaving small damages on the car and later on having them repaired all at once, just like you would do with your proper car.”
Covering most risks
Car sharing platforms take about 30 to 40% of the total rental price. The owner gets a platform and an insurance policy covering most risks in return. Renting a car at SnappCar costs 20 euro for a small city car or 200 euro or more for an electric Tesla S.