What Insurance Do I Need to Rent a Car?
When you rent a car, you are responsible for the car and anything that happens to it. You will need insurance to drive a rental car.
What insurance you need when you rent a car will depend on the car insurance coverage you may, or may not, already have.
Here are 5 questions answered about rental car insurance:
- I already have car insurance as a car owner. Do I need to buy more car insurance from the rental company to rent a car in Canada?
No, it isn’t a legal requirement for you to buy additional insurance from a rental car company when you’re renting a car.
Important note: You do need to have enough insurance, though, that will cover you in case of an accident with a car rental. Check your car policy details and check your rental car details.
Third-party liability coverage is legally required to drive a vehicle in Canada. So, it’s part of your personal car insurance.
When you get into an accident with your car and are found to be at fault, the other driver would count as a third party when filing an insurance claim against you to cover any bodily injury or property damage you caused in the accident.
The minimum amount of third-party liability personal car insurance in Canada is $200,000, except in Quebec where it's $50,000.
If you have personal car insurance, in some cases your third-party liability coverage may extend to your rental car. Check your car insurance policy’s details to find out if this is the case.
A minimum level of third-party liability also comes with all rental cars in Canada. This minimum coverage is already factored into your car rental price. You will need to check your car rental details to find out the amount of third-party liability insurance that’s included.
You may want to consider buying additional third-party liability coverage if you feel you don’t have enough coverage.
Your Western Financial Group car insurance expert will answer any questions you may have about rental car insurance.
- What if I don’t own my own car and don’t have car insurance?
You can buy car insurance from the rental car company at an extra cost to you.
It might not cover everything, though. Make sure you’re aware of the coverage they provide and what they don’t. You can choose what coverage you want.
- What are car rental insurance options?
There are usually four car rental insurance options:
Loss damage waiver (LDW) / Collision damage waiver (CDW):
This waiver covers only the car you’re renting. If anything happens to your rental car such as fire, theft, or accident, this type of coverage helps cover these costs. This coverage is similar to comprehensive and collision insurance in regular car insurance policies, but it’s for rental cars.
Car rental companies typically charge additional fees for: towing, lost revenue while the car is in for repairs, administrative fee for handling the repair, and depreciation on the resale value of the vehicle since it’s been in an accident.
The Loss Damage Waiver (LDW) / Collision Damage Waiver (CDW) can cover these additional fees, but you’ll need to check. This type of coverage can be expensive.
Personal accident insurance (PAI): It pays out a lump sum if there is a death and it also helps cover medical costs to you and your passengers.
Rental car agencies each have a different benefits package so you’ll need to check the coverage details.
Personal effects coverage (PEC)
What if your coat and laptop are stolen from your rental car? This optional insurance covers the personal property in your rented vehicle. There will be a limit on coverage and you will need to pay a deductible.
If your home insurance provides enough coverage, you do not need to add personal effects coverage to your rental car insurance.
Liability coverage (LI)
Liability Insurance covers you for damage and injury you may cause to other people and their property while you are driving a rental car. It is usually recommended that you increase the minimum coverage on your car rental coverage to $1 million or $2 million because if you get into an accident and cause serious harm or death, the minimum coverage wouldn’t likely be enough.
- Does my credit card provide car rental insurance?
Some credit cards offer collision insurance for a rental car when you use the card to rent the car and decline the rental agency’s collision damage waiver.
Your credit card will likely not include third-party liability insurance or personal injury coverage or cover any additional fees from the rental company.
Check with your credit card company to find out what coverage is provided and what the limits are. Do not assume that you would be fully covered for a car rental under your credit card.
- Does my travel insurance include car coverage?
Not all travel insurance plans have coverage for car rentals. You can choose to add rental car protection coverage to your travel insurance.
Some travel insurance plans have an add-on option for rental car collision coverage if the rental car is damaged in an accident.
Check the details of your travel insurance.
Remember that: The cost of optional car rental insurance will depend on the type of vehicle you are renting, how long your rental period will last, what coverages you choose, among other factors.
When you are renting a car, you need to be informed about the insurance coverage you will need to protect you and your passengers.
Did you know that switching your car insurance is easy and helps you save? When you switch your car insurance to Western Financial Group you can save up to 30%
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