Blog Rental Car Insurance In Canada

Oct 1, 2020

What You Need To Know About Rental Car Insurance

Black sign with orange text saying rental car

You booked your rental car ahead of time, and you're finally ready to pick it up. But will it be insured if there is an accident?

Do you have rental protection in your auto policy, or should you buy it from the company? Is it a requirement?

What you want is affordable car insurance when you rent a car 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 :

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

Coverage is available to protect passengers, vehicles, personal belongings, and you. It will also cover damages from another person's property, vehicle or injuries.

Rental agencies insure their vehicles, so your money goes into a general fund. If you do pay for more options, it means they won't pursue your damages.

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. You pay the company to forfeit the right to go after you for damages by signing the agreement. 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.