Car Rental Insurance: Are You Properly Protected?

Mar 22, 2022

March is a great time of year to escape the Canadian cold and travel abroad, but are you covered for renting a car?

Renting a Car on Vacation

There are so many things to see and do on vacation. Whether it’s visiting friends and family, or taking in the top tourist attractions, you may want to rent a vehicle.

Ontario auto insurance policies generally provide adequate vehicle rental coverage across North America (not including Mexico), but it’s important to make sure that your policy provides the protection you need.

Top 4 Car Rental Considerations

Before you make arrangements to rent a car you need to ensure that you have considered the following:

#1- Does your existing car insurance policy include additional coverage for liability for damage to automobiles that you don’t own?

  • On your policy this is called the OPCF 27 Liability for Damage to Non-Owned Automobile(s), and Other Coverages When Insured Persons Drive, Rent or Lease Other Automobiles. This endorsement provides coverage to drivers who wish to drive non-owned automobiles in Canada and the United States. However, if you are driving internationally, you will have to purchase additional coverage.
  • If this endorsement is not included as part of your existing auto insurance coverage, you may consider having it added to your plan.

#2- What about physical damage coverage?  Do I really need to pay the additional fee to the rental agency?

  • The Financial Services Commission of Ontario makes this very clear, “If you are not already covered under your Ontario auto insurance policy, through your credit card, or otherwise, and you choose NOT to purchase the collision damage waiver from the auto rental company, you will be responsible for the costs resulting from any at-fault damage to the automobile while it is in your care.”
  • The collision damage waiver, sometimes called the loss damage waiver, will protect you in the event of an accident by putting the responsibility/cost for damages back to the rental company.
  • Some waivers will have exclusions, so be sure to review the details carefully.

#3- Am I limited to renting a certain kind of vehicle?

  • The short answer is no. But the coverage provided by the OPCF 27 endorsement comes with a limit for physical damage. This limit is chosen by the policy holder and can be increased if required.
  • Be sure to rent a vehicle that is not worth more than the existing limit of the OPCF 27 coverage. In simple terms, don’t rent a Ferrari when your current policy has a $50,000 limit. Also, consider the exchange rate when deciding on a limit.

#4- Have you reviewed your accident benefits and liability coverage?

  • Your accident benefits & 3rd party liability coverages are portable. However, you may not have enough coverage once you take into consideration where you will be driving.
  • For example, if you are driving in the United States in downtown NYC and you get into an at-fault accident, is the liability limit on your policy sufficient to cover you in the event of a lawsuit?

Coverage Options

There are many options for adding coverage or increasing the existing coverages on your auto insurance policy, from adding optional accident benefits, to increasing your liability limits or adding or increasing coverage for physical damage to non-owned automobiles.  

Insurance options can be confusing, but we can help. Contact Oakville Insurance Brokers to make sure you are properly covered.