Rental Insurance and Damage Waiver

Abstract

The rental insurance and damage waiver have these elements of functionality:

  • To be able to record insurance information for a customer and for this to include different types of insurance such as Employee Liability, Public Liability, 3rd Party Insurances and Rental Product Specific insurances.
  • To be able to configure automatic checks regarding insurance level and validity, when a product is rented, and
  • If required, the automatic application of a charge if no insurance or insufficient insurance is in place.

A particular insurance for a customer will be able to be defined at one of the following levels:

  • Customer level – no rental agreement checks
  • Customer / Product Group level – rental agreement line entry checks

The insurance definitions will be made from an option, 23='Customer Insurance' or 24='Insurance by Product Grp' against the customer record in 'Customer. Open' (CRS610) – Customer Master.

The Rental Agreement Order Type will define whether Rental Product Specific insurances are checked on a rental agreement. The flag will be passed to the agreement header and will be able to be amended there if required. At agreement line entry the current agreement header value will be recorded for any later reference and follow up.

At agreement line entry a check based on the customer / product group of the item or serial number entered will be made if the flag is ticked on the agreement header. The check will be date based and replacement value based against the level of cover.

If a check fails at the agreement line entry, the setup will determine what the action should be:

  • No action
  • Warning, auto addition of line charge
  • No warning, auto addition of line charge
  • Stop, agreement line entry not allowed

Functions created for:

  • 'Insurance ID. Open' (CRS681)
  • 'Customer Insurance. Open' (CRS682)
  • 'Customer Insurance by Product Grp. Open' (CRS683)

Tables defined for:

  • Customer Insurance
  • Customer Insurance by Product Group

CSYTAB table will be used for Insurance ID.

Where the replacement value by serial number will be held will be covered in development item 'RE05 - Serial Number based pricing'.

The replacement value at item level will be held at the Item master (MITMAS) level and introduced by this requirement.

Background

Damage waiver, or as it is often referred to, collision damage waiver (CDW) or loss damage waiver (LDW) is an optional damage coverage available while renting a vehicle. It covers the rental vehicle.

When a customer does not pay the vehicle rental company to waive damage, and a rented vehicle is stolen, or damaged by accident, vandalism, weather (hail), etc., the customer or other insurance must pay to the rental company the full cost of repair, plus administrative charges and, in some cases, loss of use.

Damage Waiver meets the basic definition of insurance, since it transfers some risk from the vehicle renter to the rental company. However rental companies do not call it insurance, since it is a waiver between the renter and the company that the company waives their right to charge the renter for valid damages to the vehicle. Rental companies are not licensed or regulated as insurers. There are also no claims made. Rental companies treat damage waiver as a waiver of their right to make the renter pay for damage to the vehicle.

In the rental industry are the rented vehicles often very expensive, so damage waiver is a common part of the rental industry.

Limitations

  • Insurances check will be limited to rental agreement lines of line type 5,7 and 8.
  • Insurance checks will not be cumulative and will not take into account existing / open rental agreement lines
  • Insurance checks will be made solely at rental agreement line entry based on the level of insurance for the customer and product group, the validity of the insurance and the re-placement value either by serial number, if entered and a value exists, or by item number if not.
  • An amendment to an agreement line will not trigger a further check
  • Since the check is made solely at agreement line entry, the 'Product Insurance Check' flag at line level will be a display only field. The setting of this flag will be driven solely by what the agreement header flag was when the agreement line entry was made. This will then serve as an audit trail of what the position was when the agreement line was created.
  • There will be no checks for general insurance policies, only those specific policies defined at customer / product group level
  • There will be no management of customer insurance policies i.e. should a policy lapse, not be renewed or cancelled during the period of cover then there will not be any message or warnings generated.

Workflow

In 'Rental Agreement Type. Open' (STS020) tick the check box for 'Product Insurance Check' in order to activate or deactivate the functionality. And when creating an agreement this flag is passed to the agreement head in 'Rental Agreement. Open' (STS100).

In function CRS681 you add the Insurance ID, and in function CRS682 you define the customer insurance and it's called from CRS610 with option 23='Customer Insurance'.

And in function CRS683 you add the customer insurance by product group, which can be reachable both from CRS610 with option 24='Insurance by Product Grp' and CRS682 with option 11='Connect prod group' and also from the command menu where you type in the name CRS683.

It is here the setup for the connection between customers, product group and insurance id are done, and the conditions for the damage waiver and which charge that should be used when necessary.

The field 'Ins chk basis' indicates what type of insurance check that should be done:

0 = No check

1 = Valid from covered

2 = Valid to covered

3 = Valid from/to covered

4 = No check, perform action

And the field 'Ins chk actn' indicates which action should be done if the insurance check fails:

0 = No action

1 = Warning, no auto line charge

2 = Warning, auto line charge

3 = No warning, auto line charge

4 = Stop line entry

The replacement value used is hold at 2 levels, item level and serial number level. The re-placement value on item level is visible in 'Item. Open Service Supplement' (SOS001).

And the replacement value for serial number, which is handled by 'RE05 - Serial Number based pricing', is visible in MMS250.

Flowchart

Follow These Steps

At agreement line entry will the following checks be made:

  1. First initialize the fields:

    • Product insurance check
    • Insurance ID
    • Insurance check basis
    • Insurance check action

  2. For line type 5, 7 and 8 check the Rental Agreement Header to see if the 'Product insurance check'- flag = 1. If 0 then go to 7.

  3. If flag is 1 then retrieve the product group for the item or serial number item being entered. Also retrieve the 'Replacement value' from appropriate table.

  4. Check to see if an insurance record exists on CRS683 for the customer / product group. If so use this, if not check to see if a record exists for the customer / blank product group. If so use this. If neither exists, continue check with customer blank, if not exists go to 7

  5. If record found at 4, then retrieve the 'Insurance check basis' flag.

    • If 0, then no further checks required, go to 7
    • If 1, then check the 'Valid from date' (BLFVDT.STAGLI) is in the range of the 'Insurance from date' and 'Insurance to date' and check the 'Insured amount' is > 'Replacement value'. If not then go to 6
    • If 2, then check 'Valid to date' (BLLVDT.STAGLI) is in the range of the 'Insurance from date' and 'Insurance to date' and check the 'Insured amount' is > 'Replacement value'. If not then go to 6
    • If 3, then check the 'Valid from date (BLFVDT.STAGLI) and the 'Valid to date' (BLLVDT.STAGLI) are both in the range of the 'Insurance from date' and 'Insurance to date' and check the 'Insured amount' is > 'Replacement value'. If not then go to 6
    • If 4, then no check required, just perform the action as per the 'Insurance check action'. Go to 6

  6. If the insurance check basis failed, or is set to 4, then apply the 'Insurance check action':

    • If 0, then no further checks required, go to 7
    • If 1, then issue a warning message 'Warning: Insurance check for product group 'product group name' failed, press ENTER to continue and take appropriate action'
    • If 2, then issue a warning message 'Warning: Insurance check for product group 'product group name' failed, press ENTER to continue and line charge will be added automatically'. Add the line charge according to the held value to the table STLICH
    • If 3, then no message is issued and line charge is added automatically to the table STLICH
    • If 4, then issue stop message: 'Insurance check for product group 'product group name' failed, Item / serial no cannot be added to agreement'

  7. End of insurance check process

Setup

  1. Select the check box 'Prod ins check' in STS020 if at agreement line entry a check should be made for valid customer product insurance

  2. In CRS681 you define the customer id. The field indicates the identity of the customer insurance or the customer product insurance

  3. In CRS682 you connect the insurance id to the customer

  4. In CRS683 you connect the product group

  5. In 'Item. Open Service Supplement' (SOS001) you define replacement value on item level

  6. In 'Serial Number Based Pricing. Open' (MMS250) you define replacement value on serial number

  7. In 'Item. Open' (MMS001) connect item number to product group