Blog Rental Car Insurance In Canada

Oct 1, 2020

What You Need To Know About Rental Car Insurance

Car Sign

Do you have rental car coverage in your auto insurance or should you buy it from the renting company?

What you really want is affordable coverage that gives you the protection you need. In this blog post, we’ll provide you with some clarity about your options.

What Is Rental Car Insurance?

Insurance for rental cars refers to one of two things: Vehicle protection from the renting agency or coverage for the rented car within your policy. For example, some policies include an endorsement if your vehicle is getting repairs due to accident damage.

These policies are available to protect the vehicle, your personal belongings, and liability. Here is a look at the four different types available:

  • Collision damage waiver (CDW) : Also called loss damage waiver (LDW). It provides protection from costs for theft or collision. This is not insurance - by signing the agreement you pay the company to forfeit the right to go after you for damages. It is required, but many policies or credit cards cover this.
  • Liability insurance (LI) : You get protection from being liable for an accident. It covers you if you are at-fault for damaging another vehicle or property. It will cover the costs associated to the vehicle or medical benefits to those who are injured. It is required to add, unless your insurance has $1-$2 million in liability and OPCF 27 which will protect you in Canada and the United States. If you travel frequently, adding this to your policy will cost you less than paying each time you rent a vehicle.
  • Personal accident insurance (PAI) : This is accidental death coverage for the driver and any passengers in the vehicle at the time of the accident. It is not required, however it is risky not to have if you do not have it.
  • Personal effects coverage (PEC) : Protection for your personal items in the vehicle. There is often a stated limit and will need a deductible paid before any claim is paid out. It is not required, if you have home insurance - if you so not, it is suggested to pay for this if you do not want to lose something $500 or less.

There are a couple ways to find out if you have insurance. The first is to check your policy. The other way to check is to contact your insurer. They will be able to tell you how much of your rented vehicle will be covered.

Man handing car keys over

Do I Need Rental Car Insurance In Canada?

The short answer is yes. If you rent a car, you need some form of coverage to protect the vehicle and yourself. Without it, you would have to pay for any damage out of pocket that is above the basic protection. If you don’t have a vehicle, you can get it from the renting company or your credit card company.

Where Can I Get Rental Car Insurance?

Here are the most common places to get coverage :

  • The Rental Company : This will be offered when you pick up the vehicle. It covers you for some damage to the rented vehicle, but there are exclusions.
  • Credit Card : You may have protection through your credit card if you book using the card. The cost varies based on your card type and provider.
  • Your Automobile Insurer : Most insurers offer options that cover damage to vehicles you don’t own. This endorsement is known as Legal Liability For Damage to Non-Owned Automobiles.

If you are looking to lower the cost of the vehicle you are renting, shop and compare prices online. You can also leverage loyalty programs, coupons or choose the economy car. Booking your vehicle pick-up outside the airport is often a more cost affordable option.


Rental Car Insurance FAQs

You need some form of car insurance when you rent a car. Without it, you would have to pay out of pocket for any damage. Even a minor accident could cause thousands of dollars in damage.

It depends on your policy. Some insurers have a set amount they allot for a rental. For example, you may have $2000 in coverage. If you open a claim and require a rental, your insurer will usually notify you of limits.

It is a good idea to purchase collision insurance from the rental car company if you don’t have a personal auto policy. If you already have coverage, your policy may cover it.

If you have OPCF 20 on your policy, you can get a rental. A quick call to your insurer can confirm this.

Yes. Rental cars automatically come with basic protection. However, the basic amount is minimal. Any damage above these limits you would have to pay for out of pocket.

Make Sure You're Covered For Rental Cars

Before you decline the offer from the car company, make sure you have protection through your policy. Regardless of the type of vehicle you are driving, its important to have proper coverage.

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