Does My Car Insurance Cover a Rental Car?
There are numerous reasons you may need to rent a car in the not-so-distant future.
You’ll most likely want to rent a new ride if you’re planning on going on a trip to another province or country. On the other hand, you may need to rent a new set of wheels if you got into an accident that severely damaged or totalled your car.
Have you ever rented a car in the past? Then you know that certain aspects of the process can feel confusing or overwhelming. This is undeniably true when it comes to rental car insurance. At Surex, we receive questions about rental car coverage all of the time — some common examples being, “should I buy insurance from a rental car company?” and “does my car insurance cover a rental car?”.
Instead of leaving policyholders in the dark, we feel this is an excellent opportunity to answer some of your questions!
Continue reading to learn more about car insurance coverage for rental cars in Canada.
START A QUOTEWhat types of coverage do rental car companies offer?
First things first — let’s go over some of the basics of rental car insurance.
Let’s start with the coverage that rental car companies offer.
Most rental car companies in Canada offer the following types of car insurance coverage for drivers:
- Loss/collision damage
- Liability and supplemental liability
- Personal effects and accidents coverage
Knowing what types of coverage rental car companies offer can help you determine whether you want (or need) the additional protection.
Does my car insurance cover rentals in Canada?
This is a bit of a lengthy answer, so buckle up your seatbelts.
Your eligibility for coverage depends on if you have liability insurance or full coverage. The severity and classification of damage you cause also influences your eligibility for coverage.
Does my liability insurance cover rental cars in Canada?
As you may know, liability coverage is a type of insurance that financially protects drivers after being involved in an unexpected incident that results in a severe injury and/or death. Liability insurance is mandatory in Canada, so you likely have this type of coverage already.
Most car insurance providers in Canada will extend liability coverage to their policyholders (double-check with your provider to confirm). This means that if you get into an accident in your rental that injures another driver, your car insurance provider will cover the expenses (depending on your limit).
As mentioned above, most rental car companies also offer liability coverage. Unless you want to pay for the same coverage twice (this is often referred to as overlapping coverage), you can likely pass on the rental car company’s offer.
What if I have the minimum level of liability coverage in my province?
If you have the minimum level of coverage, you may want to utilize both options. Having supplemental liability insurance will ensure that you’re financially protected in the event of a collision that injures or kills another driver.
Does full coverage protect rentals in Canada?
Full coverage is a term that describes a policy that has comprehensive and collision insurance.
Comprehensive coverage — A type of car insurance that financially protects drivers from unavoidable events and off-road risks, like severe weather damage. Comprehensive coverage also protects drivers from perils like theft and vandalism.
Collision coverage — A type of car insurance that financially covers expenses after a driver damages their vehicle. For instance, if a driver accidentally backed into a pole, they could file a claim through their collision coverage.
Some car insurance providers in Canada do extend full coverage to rental cars; however, not all of them are quite so generous.
Assuming that you have sufficient coverage can lead to some serious and expensive issues. If you happen to get into an accident and aren’t eligible for coverage, you may have to pay for the damage by yourself. This is why you should always confirm with your car insurance provider beforehand.
When should you get rental car insurance coverage from a rental company?
There are a handful of situations where buying insurance from a rental car company is genuinely the best (or only) option for drivers in Canada.
Some examples include:
- Drivers that don’t have a car insurance
- Drivers that have insurance with the minimum or low liability limits
- Drivers that value having peace of mind
Please note that even though you don’t need an auto insurance policy to be able to rent a car, you still need to have a valid driver’s license. Click here to learn more about the requirements for renting a vehicle.
Are there other options for drivers that want rental car insurance?
Yes, there’s another option for insuring your rental car. It's not uncommon for credit card companies to offer rental car insurance as a special perk for premium programs or services.
Rental car insurance from a credit card company is generally more extensive than options that you’ll find at agencies. Contact your credit card company to find out if you’re eligible for this type of car insurance.
Does my car insurance cover rentals in the United States?
This is a fantastic question!
If you’re planning on travelling across the border, your current car insurance policy will partially cover your rental vehicle. Generally, Canadian travellers are able to utilize their liability insurance while renting a car in the United States. Travellers can purchase additional coverage from the rental car agency.
Before starting your next adventure, don’t forget to look into travel insurance.
Thinking about travelling to Mexico?
Canadian travellers should know that their rental car liability insurance is not valid in Mexico. If you plan on taking a rented vehicle into Mexico, we suggest notifying the rental company beforehand to learn about their specific requirements. Select American rental companies do allow travellers with US citizenship to purchase Mexican car insurance, which protects them as soon as they cross the border.
Do you still have questions about rental car insurance in Canada?
We know that this is a lot of information to digest; if you have any questions about rental car coverage or car insurance in general, don’t hesitate to contact one of our experienced advisors. Our advisors are more than happy to shine some light on anything that’s still unclear.
