Electronics rental in focus: challenges and suitable insurance solutions

Growth and challenges in the field of electronic equipment rental

In times of climate change and increasing environmental awareness, the circular economy is becoming more and more important. In particular, the area of electronics rental is coming into focus. Instead of constantly buying new devices, more and more consumers and companies are turning to more sustainable alternatives such as renting or borrowing.

A central element of the circular economy is the principle of keeping products in the utilisation cycle for as long as possible. For example, devices that are not taken over after the rental or loan period are often overhauled and brought up to the latest state of the art and then rented out again or sold to specialised refurbishing dealers.

However, the growing demand for such models also brings new challenges. What risks arise in the rental business and how can they be covered? Can used equipment be insured at all?

In the following, we will examine how innovative insurance solutions can help to successfully implement these sustainable business models.

Insuring used electronic devices?

If your company takes back devices after the rental or loan period and rents these used devices out again, there may be two problems.

Firstly, the condition of the used device must be determined. After a long period of use, components may need to be replaced in order to offer the next customer a flawless user experience. This requires cooperation with certified workshops and testing centres that ensure and certify that the devices are in good working order.

This can raise the problem of finding an insurance company that will insure used equipment and still offer comprehensive benefits. If the acquisition costs of the equipment are financed by banks, they will require that the equipment be adequately insured for each rental period anyway.

Traditional insurance policies often do not cover the special requirements of used equipment. Innovative insurers are trying to close this gap with customised insurance solutions to provide comprehensive protection for both companies and end customers.

Aspects of the right insurance cover

Companies that rent out electronic devices must pay attention to various special features when it comes to insurance coverage in order to ensure comprehensive protection for their inventory and business processes. Here are the most important points:

• Theft, loss and misappropriation: One of the risks associated with renting out electronic devices is the risk of theft and loss. Expensive electronic devices are a favourite with thieves, and rental companies must ensure that their insurance covers the risk of theft. In particular, the insurance should also cover the risk of misappropriation by customers. There is a high risk that new devices in particular will be misappropriated or not returned.
• Damage and destruction: Many electronic devices are delicate and can be easily damaged. A fall from a desk or a glass of water knocked over can render a laptop unusable. A good insurance policy covers damage caused by accidents or improper handling.
• International protection: When travelling abroad, you don't want to be without your mobile phone, tablet and other devices. Global protection is therefore a key factor in customer satisfaction.

For companies in the rental and leasing business for electronic devices, a carefully selected and comprehensive insurance policy is essential. The consideration of used devices and protection against theft, destruction, loss, damage and misappropriation is crucial.

Such an insurance package can be found at hepster. The insurance cover is valid immediately, worldwide and even includes original accessories. The various services can be combined individually. It does not matter whether the rental contracts are short or long term. Our tailor-made solutions can be adapted to any requirements. As one of only a few insurers, hepster also offers protection against misappropriation.

The right insurance model not only offers financial protection to providers, but also strengthens customer trust and promotes long-term customer loyalty. By minimising risks and offering comprehensive protection, we help landlords and rental companies to run their business sustainably and successfully.

Options for insurance

Lessors can choose between insuring their equipment themselves or offering their customers the option of choosing a suitable insurance tariff when renting and insuring themselves individually. Both options offer specific advantages and can make sense depending on the business model and customer requirements.

Providers who insure their entire equipment inventory have continuous protection, regardless of whether a device is currently being rented or is waiting in storage for its next use. This option is less expensive for customers, as they do not have to worry about insurance themselves, but they also rarely have a choice in terms of coverage. The rental company can partially include the cost of insurance in its prices. This gives the provider the advantage of a predictable calculation. There are no unforeseen costs for damage or theft, and budgets, prices and sales can be calculated accurately, as there are no high one-off costs for replacing equipment, as a fixed, calculable insurance premium is paid.

Alternatively, the rental company can work with an insurance company and offer its customers a choice of insurance for the rental period. This gives customers the flexibility to tailor their insurance cover to their individual needs. Some customers may prefer comprehensive cover with theft protection, while others may want to avoid the increased costs of this service. This option allows rental prices to be structured much more flexibly, but they are usually higher because the provider does not determine the level of cover itself. From the provider's point of view, however, there is the option of integrating the insurance into a commission model. This represents an additional source of revenue for the provider. However, offering insurance as an option also presents certain challenges. If customers do not fully understand the necessity or the benefits of the insurance, the higher prices will lead to dissatisfaction. In the event of a claim, they could also be surprised and disappointed when it is suddenly discovered that they are not insured against the damage that has occurred. This in turn affects customer confidence.

Conclusion

Integrated insurance offers considerable added value in the rental and leasing business for electronic devices. Not only do they comprehensively cover the provider's inventory of devices, but they also offer customers a high degree of security and trust. Protection against embezzlement, coverage for damage or destruction and theft protection are factors that benefit both providers and customers equally.

For providers, this means a reduction in financial risks and the opportunity to generate additional income through commissions. Customers, on the other hand, enjoy the advantage of a completely secure rental period.

The right insurance is a clear competitive advantage. The rental and leasing business can become safer and more profitable, and can be calculated more accurately overall.

Are you still looking for your competitive advantage? Let us work together to find the optimal insurance solution for your customers and your business.