Blog Rental Car Insurance In Canada

Jun 20, 2024

Does my insurance cover rental cars in Canada?

man getting rental car keys

You have already booked your rental car in advance, and you are prepared to pick it up. What about insurance?

Are you covered if there is an accident? Do you have rental protection in your auto policy, or do you need to purchase it from the rental company? Is this a mandatory requirement? You want affordable car insurance when renting a car that gives you the protection you need.

In this blog post, we'll provide you with some clarity about your options.

Three main takeaways about rental car insurance:

  • You can get coverage for a rental car from your personal car insurance.
  • Having protection on a rental vehicle can help protect you in the case of accidents, theft, damages, and injuries.
  • Your insurance premium may change if you add another driver, travel internationally, or buy extra rental company insurance. Always review the terms and conditions carefully.

What's on this page:

What is rental car insurance?
Types of rental car insurance
Do I need rental car insurance?
Does my credit card cover rental car insurance?
Where can I get rental car insurance?
How to save money on a car rental
How much is insurance for a rental car?
Rental car insurance FAQs

What is rental car insurance?

Insurance for rental cars refers to one of two things:

  1. The coverage you buy from the rental agency.
  2. Coverage can be included with your personal policy for rental car costs. OPCF 27 is an endorsement if your vehicle is getting repairs due to accident damage to pay for rental expenses.

Rental car insurance will cover damages to another person's property or vehicle or injuries to passengers, the other driver, and yourself. Whether you can get their coverage directly or customize your needs by working with a broker.

Types of rental car insurance

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

  • Collision damage waiver (CDW): Also called loss damage waiver (LDW). It protects you from costs related to theft or collision. 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 with the vehicle or medical benefits to those 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. Adding this will cost you less than paying each time you rent a vehicle if you frequently travel.
  • 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 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 do not, it is suggested to pay for this if you do not want to lose something $500 or less.