rental car insurance canada

Car Rental Insurance: Are You Covered?

Picture it: you’re planning a weeklong trip to tour around the province, starting in St. Catharines or Niagara Falls, going up through Algonquin Park and back through the Haliburton area, with stops in Toronto and Hamilton, to see the sites.

Sounds great, right? Then you get an email from a car rental company you used once, with a special week long offer. Your car already has a lot of mileage so this seems like a great solution.

Off you go. Halfway through Algonquin Park, you have an accident with another vehicle that shot across the road in front of you, so they could photograph a moose. Now what?

The steps you take following an accident, whether in your car or a rental car, are more or less the same except that you will need to notify the car rental agency as well.

The more important thing to know is the steps you need to take BEFORE you leave the agency lot with your rental.

Before You Go Pick Up Your Rental, Check Your Insurance Coverage

Actually, don’t just check: double check and triple check your insurance coverage. There are three ways you can be covered in your rental vehicle:

Your own auto insurance policy

Insurance providers in Ontario have an endorsement available for auto policies called an OPCF 27—Legal Liability for Damage to Non-Owned Automobiles. It’s more commonly known as the ‘rental vehicle endorsement’. The OPCF 27 is intended to extend your insurance policy to include rental vehicles.

Many policies have this included but it’s not automatic, so you need to check your policy to see if you have it. It can be added on to most policies for a minimal annual cost. Certainly, it’s cheaper than the daily rate for the Collision Damage Waiver offered by the rental car company (more on that below!)

A couple of caveats with regards to relying on the OPCF 27 endorsement to cover your rental vehicle:

  • It will only apply to vehicles being driven in Canada and the US. If you decide to venture further, into Mexico for example, or if you are renting a car overseas, you would need additional coverage.
  • The endorsement only applies if the person renting the car is the same as the person named on the policy. Further, it might not cover any other drivers who are not named on your policy. So if your cousin is coming with you on the trip, they can’t drive the rental without additional coverage being purchased.
  • If something were to happen to your vehicle at home—say, it got stolen—AND you had an accident with the rental car, the insurance company might only cover one claim.
  • What coverage you have on your existing car is what coverage you have on your rental. If you don’t have collision on your car because it’s an older model, you won’t have it on the rental.
  • Your coverage won’t extend to a high end or luxury vehicle, so you can forget about renting a Ferrari, if what you normally drive is a Toyota! It will also not extend to trucks and vans, so if you’re renting a truck to help your brother move to a new apartment, buy the coverage the rental agency offers you.

“But I’m covered on my credit card”

Many credit cards offer collision damage protection as part of the ‘benefits’ but you need to check your contract with them to make sure of the details.

Most cards also have conditions such as requiring that you rent from certain companies in order for the coverage to apply, and limitations as to who may drive the vehicle.

Also, not all cards include third party liability coverage so if you don’t have a car insurance policy of your own, you might not have liability coverage.

You’ll also have to use that card to pay for the entire rental, and they might require that you decline the Damage Waiver that the rental company offers you. And again, forget about the Ferrari…

Car rental agency coverage

Car rental agencies will require you to accept or decline a Collision Damage Waiver policy, charged on a daily basis, for the duration of your rental.

For most collisions, having the waiver basically ensures that you don’t have to deal with the cost of some damage to the vehicle.

This coverage only covers the value of the vehicle. If you don’t have an OPCF 27 on your own insurance policy, or you don’t have a car with a policy, you won’t be covered for injury, loss of property, or even liability.

You could end up facing a lawsuit if you are at fault in a collision. Some agencies offer additional coverage for medical expenses, but these too need to be carefully reviewed.

As with the other options, there are exceptions, so read the fine print carefully!

When You Pick Up Your Car Rental, Double Check The Fine Print On Your Rental Agreement

If you decide to drive along unpaved roads while on your trip to Algonquin Park, and you bought the Collision Damage Waiver coverage from the rental company, you might not be covered for any resulting damage from an accident on said road.

If you drive to a different province without having specified that in the contract and have an accident there? Your coverage could be void. If you break the law in the course of the accident, and receive a ticket, you could void the coverage.

These and other exceptions vary from rental agency to rental agency so it’s absolutely essential that you check the fine print before you sign.

It sounds complicated, but really, it’s all about checking the details with your insurance broker / agent and / or your credit card company before you leave on your trip, to make sure you are covered for all eventualities.

The cost of a damaged rental car is NOT something you want to have to deal with, to say nothing of injuries of people in the other vehicle, if you’re at fault. Take your time, read the fine print, and enjoy your trip.


    0 replies

    Leave a Reply

    Want to join the discussion?
    Feel free to contribute!

    Leave a Reply

    Your email address will not be published. Required fields are marked *