What Insurance is Needed to Rent a Car?
Renting a car can be a great way to take a trip. Make sure you are protected with the right insurance before you hit the road.
Check your personal car insurance policy, your travel insurance, and your credit card benefits before deciding if you need to purchase additional rental car insurance from the rental agency.
Do I need rental car insurance?
Yes. You must have third-party liability insurance to drive in Canada and the minimum level of third-party liability insurance is already included when you rent a car.
Having more than the minimum liability insurance required in your province and other forms of insurance when renting a car is advisable.
How can I get rental car insurance?
There are several ways to obtain rental car insurance to ensure that you are protected and avoid unexpected costs.
Insurance from the rental agency
You can insure a rental car by purchasing insurance from the car rental agency. In Canada, the rental agency is legally required to provide third-party liability insurance with your rental car.
Find out if any other coverage is provided and what the limits are, and then you can decide whether you need additional coverage.
Your personal car insurance policy
Your personal car insurance policy may provide coverage for a rental car while your vehicle is being repaired and most insurers also offer insurance for vehicles you do not own. This is called Legal Liability for Damage to Non-Owned Automobiles.
Check with your insurance company to find out what coverage is provided and what the limits are. Make sure that your policy covers collision damage and liability.
Your credit card
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 liability or personal injury coverage or cover additional fees from the rental company. Check with your credit card company to find out what coverage is provided and what the limits are.
Your travel insurance
If you are travelling out of province, you will need travel insurance and it may cover your rental car. Find out what your policy covers.
Your Western insurance expert will answer any questions you may have about rental car insurance.
Types of rental car insurance
There are four types of rental car insurance. They protect you from personal liability and they protect the car, passengers, and your belongings.
Collision Damage Waiver (CDW)
A Collision Damage Waiver (CDW), also known as a Loss Damage Waiver (LDW), is an optional coverage offered by rental car companies. It covers the cost of damage to the rental car if you are in an accident or the car is stolen or vandalized. It covers repairs, lost revenue, towing fees, depreciation, and administrative fees. This type of coverage may have exclusions, like having to drive on paved roads, so check the fine print.
Third-party liability insurance
Third-party liability insurance covers you if you are at fault for an accident that injures someone or damages property. While liability insurance is included with your rental car, you should have at least $1 million to $2 million in coverage. Find out what the limit is on the policy that comes with your car rental.
Personal accident insurance
Personal accident insurance is accidental death coverage for the driver and passengers in your rental car. Though it is not required, you should have it. It is not the same as third-party liability insurance because it covers your medical bills and pays out a lump sum if there is a death.
Personal effects coverage
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.