Getting a rental car can often be a convenient and hassle-free solution to many things, from transporting that second-hand desk you found online to enjoying a flexible vacation and seeing the sights on your own timeline. For many who don’t want to own a car and deal with the costs that come with it, renting a car can be a great option to still enjoy the freedoms that come from commandeering your own vehicle.
But as you probably know, one of the biggest expenses of owning a car is the required auto insurance. Monthly premiums and deductibles are all costs that car owners have to factor into their budget. However, auto insurance is also a supremely useful thing to have, especially when you’re facing a situation where you’d otherwise have to pay hefty sums in damages or repairs. From covering instances of vandalism or theft to any damage you may have caused while driving, auto insurance is a vital protection for all drivers.
So how does insurance work when it comes to rental cars?
Rental car insurance options in Canada
Your own auto insurance
The question of whether you need extra insurance or not depends on where you rent your car. If you’re renting a car in Canada, your existing auto insurance may very well already cover rental cars. In other cases, you may have the option to add insurance for a rental car to your existing policy. Either way, it’s worth reaching out to your insurance provider and asking about your options before you rent a car. Insurance companies will usually identify the additional coverage as legal liability for damage to non-owned automobiles.
However, be warned: Some insurance providers only provide insurance for rentals if your personal car cannot currently be used because it’s being repaired. So if you want to rent a car to go on holiday, your insurance may not cover that rental.
Your travel insurance
If you have travel insurance, there’s also a chance that your policy will include insurance for rental cars. Check your policy and reach out to your provider if you’re in doubt.
Your credit card
Some credit cards also offer complementary rental car insurance. Credit cards that offer some form of travel rewards may include rental car insurance in their offers. In order to access this insurance, you have to pay the full amount of the rental with the card. Again, it’s always worth asking what your options are!
Purchasing insurance from the rental company
If your regular auto insurance doesn’t offer coverage, then you also have the option of buying insurance for rental cars. Most rental car companies will offer some form of insurance as part of the rental package (usually third-party liability coverage), with the option of adding on more coverage as needed or desired. These are the usual types of coverage you can purchase for rentals in Canada:
- Third-party liability coverage. Third-party liability coverage, which covers any damage caused to others or their property while you were driving, is a minimum requirement in Canada for anyone operating a vehicle. In Québec, the minimum liability insurance amount is $50,000. However, you may want more protection.
- Collision and loss damage waiver. CDW and LDW cover any damages that happen to the rental car itself (and only the rental car). So if your rental car gets stolen, hit in a crash, or damaged in a fire, this kind of insurance will cover those damages.
Keep in mind that if you purchase this type of coverage from the rental company, you may be charged extra fees to compensate for any potential lost revenue while the car is being repaired.
- Personal accident insurance (PAI). This kind of insurance covers any injuries that occur to you and/or any passengers in the rental car.
- Personal effects coverage (PEC). PEC protects any personal property in the rental car that was damaged, stolen, or lost. This type of coverage is often offered together with PAI in one bundle.
As you can see, there are a couple of options available when it comes to auto insurance for rental cars. But if your own auto insurance or your credit card or travel insurance don’t offer some form of insurance for your rental car, then you should definitely consider purchasing insurance from the rental car company. The risk of an accident or damage is simply too expensive to entertain.
Are you curious about which auto insurance providers also offer rental car insurance? YouSet will quickly and efficiently create a bespoke list of possible insurance policies for you, all tailored to your needs and budget. Once you find what you’re looking for, you can easily buy that policy online, right on our site. Head on over to check us out!