When renting a car, knowing what type of rental car insurance coverage you need on your next excursion can be overwhelming. You don’t want to be without coverage in case something goes wrong on your trip, but you also don’t want to be over-insured, either. Let’s look at some of the most commonly asked questions about car rental insurance.

What type of insurance should you get when renting a car?

Most car rental companies will include some sort of basic insurance within the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This basic insurance is limited and can still put you at risk of huge out-of-pocket expenses in case something goes wrong with your rental.

Can I avoid car rental insurance?

There are some situations where you should consider buying rental car insurance, even if you’d like to avoid it:

1. You don’t have car insurance and your credit card doesn’t provide coverage 

Without a standard auto insurance policy that includes collision and comprehensive coverage (or at least a credit card that provides CDW and LDW coverage,) there is too much financial risk should you get into an accident.

2. Your auto insurance policy doesn’t have the right endorsement

To be covered for liability and personal accident insurance, your Ontario auto insurance policy needs the OPCF 27 (liability for non-owned automobiles) endorsement to be transferable to a rental car.

3. You are a high-risk driver and it’s not worth another claim

Already paying a lot for car insurance due to accidents and tickets? It’s not worth the risk of another claim with your insurer. However, know that your insurance company will find out about the collision as it shows up on your motor vehicle record.

4. Traveling for business

Do not assume your personal policy has you covered if you’re away on official business. Your employer is paying for the rental car, therefore, they should pay for the insurance, too.

5. Renting sports cars, trucks, luxury or specialized vehicles

These are expensive cars and have a higher replacement value than your own. If you want to pay for fancy, best to pay for the fancy insurance as well.

6. Your personal policy only covers the minimum

Collision and comprehensive, which covers CDW and LDW, are optional on your auto insurance policy. So, if you don’t have them and your credit card doesn’t cover them, buy the insurance. Also, the minimum third-party liability is $200,000, which we recommend upgrading to at least $1,000,000.

7. International travel (outside of North America)

Your personal policy may not cover you beyond North America’s borders. Either call your insurance provider or isure broker to find out, or pay for the insurance at the counter.

How much does rental car insurance cost?

It varies. What you’re charged for insurance-wise depends on where you are, who you are, and what type of vehicle you’re renting. Car rental prices will be lower for budget cars, and higher for luxury rentals. On average, it will cost about $65 a day. However, this will depend on how much protection you add and where you obtain it.

Is it necessary to buy insurance while renting a vehicle?

You need some form of coverage when you rent a car. Without it, you will have to pay out-of-pocket for any potential damages. Even a minor accident can cost thousands of dollars in damage.

Should I get collision coverage on my rental?

It’s a good idea to purchase collision coverage from the rental company if you don’t have your own policy. If you have collision coverage on your personal policy, it may help pay to repair the rental car if it’s damaged in an accident. However, keep in mind that a deductible will apply.

Can I rent a vehicle without insurance?

Yes. Rental cars automatically come with basic protection. However, the basic amount is minimal. When renting a car, any damage above these limits means you will have to pay out-of-pocket.

Can I add a driver to my rental car agreement?

Yes. Both the renter and the new driver must be present at the rental location with their valid driver’s licence and credit card.

What happens if you damage a rental car without insurance?

If the accident was your fault, you’re responsible for damages to the rental car and for any liability issues. If you are not at-fault, your rental company will work directly with the other driver’s insurance company.

Do you get your money back after renting a car?

Once you return the vehicle, the branch will refund your security deposit in full unless there are additional unplanned charges, such as fuel replacement, vehicle damage, or a late return. The time it takes to receive your refund is based on the method of payment used to pay for your rental. 

What limit of car rental insurance is enough?

Rental car insurance companies typically have only the minimum liability on their vehicles, which is $200,000. The default is $1,000,000. but many brokers recommend $2,000,000 as it covers much more. Sometimes Personal Effects Protection gives you peace of mind for your personal belongings and valuables.

Does my rental insurance cover accidents that involve cyclists?

Odds are that the answer is “Yes!” Most car insurance policies cover such losses as injuries, medical expenses, lost wages, and suffering caused by accidents involving a car and a cyclist. You must have Personal Injury Protection coverage on your auto policy – be sure to discuss this with your isure broker BEFORE hitting the road. All in all, driving in Ontario can be expensive.

Choosing to rent a vehicle may mean hidden costs, including paying extra for coverage that you may already have. Ultimately, you want to have affordable car insurance when you rent a car while getting all the protection you need. Avoid car rental insurance costs by doing your homework and reading your personal car insurance policy thoroughly for coverage. Discuss car rental options when purchasing travel insurance because with some preparation and research, you can save yourself a bundle by being able to safely decline insurance you don’t need.

Be sure to talk to your isure broker to understand what level of coverage you have BEFORE you visit a rental car agency so you don’t feel pressure to buy unnecessary coverage!

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