I've been thinking, "What are car rental deductibles and NOC's? Should I get them? "I don't understand the difference between a liability waiver and an NOC..."When renting a car, many people face this question.
NOC (Non Operating Charge)...System to exempt business compensation (20,000-50,000 yen) after an accident
Ideally, you should have both types of coverage because they are similar but "cover different things."deductible = repair costs" and "NOC = operating coverage." It is easy to understand if you have an image of what it looks like.
I will now explain in as much detail as possible the specifics of how these two types of coverage work, the differences between them, and whether or not you should purchase them.
Table of Contents
What is an "exemption" anyway?
Car RentalDisclaimer.is,A system that exempts drivers from paying fees when they are involved in an accident with a rental car.It is. This system is also referred to as "indemnity coverage" or "indemnity plan.
Basically, a rental car comes with property coverage (for the other party's car or building) and vehicle coverage (for repairs to the rented car), though,If you have an accident, you must pay part of the repair costs yourself.is the usual practice.
Advantages of the Liability Waiver System
Disclaimer of Liability Compensation System
Limited coverage!
Even if you have liability coverage, you will not be covered if you violate the law (drunk driving, speeding, etc.) or if you cannot obtain police proof of the accident.
NOC (Non-Operation Charge) is separately charged even if you have deductible coverage.
The deductible compensation only "reduces the deductible for repair costs to zero" and requires a separate NOC to cover the loss of business for the rental car.
Liability coverage is "optional" but recommended by many rental car companies.
You can join the plan by paying an additional fee when you rent a car (about 1,500 yen per day). Recently, many plans include liability waiver coverage.
Specific examples of indemnity plans
Let's say you don't have liability coverage (just the cost of the rental car with no coverage) and you hit a wall in a parking lot while driving your rental car.
Breakdown of repair costs
| cost item | repair expense | Deductible (co-payment) |
|---|---|---|
| Repair costs for rented vehicles (vehicle coverage) | 300,000 yen | 50,000 yen |
| Repair cost of the other party's building (property damage compensation) | 500,000 yen | 50,000 yen |
Even if you incur repair costs totaling 800,000 yen, you do not have to pay the full amount of 800,000 yen because the insurance will cover it. However, you must pay "50,000 yen + 50,000 yen = 100,000 yen" as a co-payment (deductible).
If you have purchased indemnity coverage
If you have the deductible coverage, this co-payment (100,000 yen) will be reduced to zero. Even in the unlikely event of an accident, you will not have to pay any out-of-pocket repair costs thanks to the deductible coverage.
What is NOC (Non-Operating Charge)?
NOC is a fee charged as operating compensation during the repair period when a rental car needs to be repaired due to an accident or breakdown.
Amount of NOC
The NOC varies from car rental company to company, but is generally set at the following amounts
| Vehicle Condition | NOC (non-operation charge) amount |
|---|---|
| Rental car can drive itself (can be returned) | 20,000 yen |
| Rental car cannot be driven on its own (towed) | 50,000 yen |
Why the difference in NOC amounts?
Why is a car that can drive itself worth 20,000 yen and a car that can't drive itself worth 50,000 yen?"
This is due to the difference in the "magnitude of operating loss" until the rental car is repaired.
The longer the repairs take, the greater the loss to the rental car company and therefore the higher the NOC amount.
What happens if I get NOC compensation?
If you purchase NOC coverage (NOC wide coverage), you will pay zero NOC. Note that even if you purchase liability waiver coverage, NOC is an extra charge. In other words, if you rent a car, it is best to purchase both "Liability Waiver + NOC Compensation".
Best "deductible + NOC coverage".
Both deductible and NOC coverage are optional. You have a choice and you are not forced to get it. But I have lived in Okinawa for a while and have seen many accidents with rental cars. I have seen both single vehicle accidents and accidents involving property.
It is not just a matter of "if you drive safely, you will be fine." There is also the other party, so no matter how careful you are in driving, there is always the possibility of an accident. Since I saw an accident with a rental car, I always make sure to have "Liability + NOC coverage" when I rent a car myself. I have never had an accident or been involved in one, but just having the coverage makes a difference in my peace of mind!
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- Okinawa travel media "Okibura" has been happily operated since 2020 by Kazunari, a computer geek, and Son-chan, an anime & food lover! They love Okinawa so much that they have visited more than 50 hotels and 500 restaurants in the prefecture, and they share the charms of Okinawa on Instagram and on the web. We will bring you the charms of Okinawa that you can't find anywhere else, from the unique perspective of a husband and wife team!
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