On the Road with Car Rental Insurance

Have a road trip coming up? Renting a car? Before you leave home, make sure you know you'll be covered.

With the days getting hotter, and vacation days to use, many of us are thinking of taking a road trip, driving up to the cottage, or making a few trips to the beach over the summer.

But how will you get to where you want to go? Many of us will drive our own personal vehicles but many will choose to rent, especially if the vehicle is older or too small to handle the trip.

When it comes to car rentals, you have a few options for car rental insurance that will cover you as a driver:

1. Through your car insurance provider

You may have personal car insurance, but that doesn't necessarily mean its transferrable to rental cars. It would be beneficial to contact your agent or broker to see if your coverage extends to car rentals, or if they offer an add-on that could potentially save you thousands of dollars should the unexpected happen.

In Ontario, the coverage is known as "Legal Liability for Damage to Non-Owned Automobiles. It is also referred to as the Rental Vehicle Insurance Endorsement or OPCF 27 (or SEF 27 if you live in Alberta).

It is important to understand the limitations of this additional coverage, as it may only be valid in Canada and parts of the United States. If you are the insured person with the additional coverage that covers non-owned vehicles, the auto rental agreement must be in your name or that of a driver listed on your policy. The operators of the rental vehicle should only be drivers listed on your policy if you are using the insurance on your personal vehicle. Check in with your insurance broker or company to learn more.

2. Through your credit card

If you're going to use a credit card that offers car rental insurance, it's important to review what it offers and the limitations. You'll likely have to charge the full amount of the rental to your credit card, and seeing as you would be covered through the credit card, you would decline the collision damage waiver that the auto rental company offers you.

  • Need a credit card that includes rental car coverage? Travel rewards credit cards often include this feature and you can compare many of today's top cards online at Kanetix.ca.

It's important to be aware that your credit card car rental insurance may only offer collision/loss coverage, which means you'll be on the hook for other costs not covered. Some cards may not even insure certain vehicles like trucks or mobile homes, or vehicles over a certain value, so again, it is very important to review the fine print of your car rental insurance on your credit card.

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3. Through the car rental company

When picking up your car rental and signing all the documents, you are asked if you want physical damage insurance. That coverage is generally referred to as "collision damage waiver" or "loss damage waiver".

This waiver protects you in the event that you damage the rental vehicle. The responsibility of the cost of the damage is transferred from you to the auto rental company. Generally a deductible will apply.

As protection varies from company to company, reading the fine print is essential. There may also be exclusions that you may not be aware of until it's too late, including driving on unpaved roads.

If you opt to use the insurance from a car rental company, you can still find savings in other ways. Look into the perks of your current credit cards and see if any of them offer a discount at any car rental companies. You may also discover perks you can take advantage of when you're on the road, including gas rewards, restaurant discounts, and discounted hotel rates.

Hit the road with peace of mind by making sure you're covered properly. You don't want your dream road trip to turn into a nightmare.

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