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Rental car insurance in Canada.
Knowing what type of insurance you need when renting a car in Canada can be confusing.
It’s hard to choose – between coverage from your existing auto insurance policy, any available through your credit card and offers from car rental companies, there are a lot of options.
We'll explain what coverages are available so that you can enjoy your next trip, knowing you’re financially protected in almost any situation.
What you need to know about car rental insurance.
When renting a car, there are four scenarios for which you’ll need coverage:
- Bodily injury and property damage to a third party, when you’re at fault.
- Bodily injury to self, if you’re in an accident.
- Damage to a third party’s car.
- Damage to a rental car.
Before you commit to any rental car insurance policy, check to see if your existing coverage extends to rentals.
Coverage you may have through your car insurance:
Many policies have what’s called an ‘endorsement’. This is a change to your contract which extends your car insurance coverage for bodily injury and other property damage, when you drive another car.
The specific endorsement you should be looking for in your policy is called a ‘SEF\OPCF 27’ -- often referred to as ‘a 27’.
If you have a SEF\OPCF 27, purchasing property damage coverage from a rental car company is redundant.
When you don’t have car insurance:
If you don’t have car insurance and want to rent a car, you’ll need coverage that might have otherwise extended from a car insurance policy.
Consider purchasing liability insurance for your rental car to cover any costs and damages that you cause to another driver.
We recommend coverage of at least $1 million as costs associated with a collision can add up very quickly.
Loss Damage Waivers available from rental companies
When renting a car, you may be presented with an option to sign, and pay for, an LDW or CDW -- a Loss Damage Waiver or Collision Damage Waiver.
It’s not technically a form of insurance, but an agreement that the car rental company won’t pursue you for costs, for any damages and losses, in the event of collision or theft.
Be aware that if you already have an auto insurance policy or credit card, paying for an LDW or CDW may be redundant.
Even if you don’t damage your rental car in a collision, confirm your auto insurance covers losses, such as stolen belongings.
So-called personal effects coverage may be included in your home insurance or credit card coverage. Note: it often requires that a deductible be paid.
To avoid purchasing coverage that you already have, review your existing auto or home insurance policies while also reading the fine print of your credit card agreement.
Our licenced brokers are available to answer any questions you may have about rental car insurance. Give us a call today: 1-855-754-0350.
Additional considerations for how to get cheap rental car insurance.
Rental car insurance rates are determined by several factors, including:
How many days you’ll be using the vehicle.
How far you’ll be driving it.
Coverages available through your existing auto and home insurance policies and/or credit card.
Any insurance coverages you purchase from the rental company.
The best rental car insurance often ends up being a combination of coverage you already have through an existing car insurance policy and additional coverage you purchase to fill gaps.
For example, for rental car insurance in Ontario, if you don’t have collision coverage through an existing policy as well as a SEF\OPCF 27 endorsement extending your policy coverage to rentals, you should consider paying for a Collision Damage Waiver from the rental company.
Similarly, for rental car insurance in Alberta, if your existing policy does not have an endorsement called a SEF 27 extending your policy to cover a rental, you should consider paying for a CDW.
When it comes to rentals, start with a car insurance quote, using our free, online tool.
Next, connect with one of our brokers who will ensure you have all the appropriate coverage you need when you rent a car: 1-855-754-0350.
Why work with us?
We'll review your rental car insurance costs and coverage to ensure you’re financially protected when renting a car.
Our licenced brokers will also answer all of your questions.
There’s no catch. Our tools and expertise are fast and you’re under no obligation to make a purchase.
Frequently Asked Questions about rental car insurance.
Existing car insurance is not mandatory when you’re renting a car in Canada. However, to drive in Canada, you must be insured. We recommend additional coverage, particularly if you can’t afford to replace a rental car if it’s damaged or stolen.
Nonetheless, choosing coverage can be confusing, especially if a rental company offers you several options.
When you’re trying to figure out if it's necessary to buy rental car insurance, closely review the coverage you already have through your auto and home insurance policies. You might already be covered.
Your credit card may also provide coverage, making any insurance policy from a rental car company redundant.
If you don’t have auto or home insurance nor a credit card, then rental vehicle insurance is a great way to protect yourself financially and your belongings in the event of a crash or theft.
If you turn down insurance offered by a car rental company and aren’t already covered under your own auto insurance policy and possibly through a credit card, then you’ll be responsible for damage to the rental, in the event of loss.
Your car insurance policy may extend your coverage to include rental cars.
For example, in Ontario, if liability insurance is included in your car insurance, check to make sure that it includes what’s called an Ontario Policy Change Form (OPCF27) that ports your coverage to rental cars.
So that you’re sufficiently protected in the event of a collision in a rental car, consider getting additional rental auto insurance if your existing liability insurance is for less than $1 million.
It’s very common for credit cards to offer rental car insurance. The key is to understand what your card covers you for when you’re using a rental car.
For example, you may require a different type of coverage if you’re using a rental car for work as opposed to for pleasure. For coverage, it may also be necessary that you pay for your car rental with the credit card.
Speak with your credit card provider to find out if you’re eligible for any discount car rental insurance through your card.