Does My Car Insurance Cover Rentals?


Car renters looking to save money often assume their personal insurance policies cover any nasty predicaments they encounter on the road. For this reason, rental car insurance is often the first feature forgone on a rental agreement.

But does your personal car insurance cover you in the event of an accident in a rental?

The answer? It depends.

Here are some quick insurance tips to keep in mind before you sign the dotted line on your next car rental agreement.

1. Know the limits of your coverage

Do you know how much coverage you are paying for in your current car insurance policy? If you choose to waive collision coverage for your 2004 clunker at home, for example, you have no collision coverage for the brand-new 2016 you are planning to drive off the rental lot. Make sure you fully understand what is and isn’t covered by your personal insurance and what holes are covered by a rental car insurance package.

2. Coverage for rentals stops at the border

You might be surprised to learn your private car insurance policy might not be applicable to rentals in foreign countries. This means if you get into an accident or damage part of your foreign rental, you might be liable to pay for damages.

3. Car insurance is for cars

In Canada, your private car insurance only applies to car rentals. This means commercial vehicle rentals, such as a moving van or truck, are not covered under any circumstances. Most truck rental companies make this quite clear in rental policy documents. Since most of us are not used to driving large clunky vehicles, supplementary coverage for renting large vehicles is something to consider.

4. Insurance for the roads less travelled by

For many rental companies, unpaved roads mark the end of supplementary coverage. If you’re heading to someone’s cottage this summer or traveling through rural areas, be sure to read the fine print of your car rental agreement to see if this stipulation applies. If it does, consult your private policy to make sure you are covered.

5. Coverage is based on where you live

Car insurance premiums and levels of coverage are sometimes based on your geographical location. For example, due to the availability of parts and distance to the nearest auto body shop, towing and repairing a car after an accident might cost more in a rural area than it might in an urban area. Whenever you are renting a car, ask whether repair costs might be higher in the area you are driving your rental and cross-reference with your private car insurance policy.

6. May not cover additional fees

The cost of repairing a rental car after an accident is different than repairing a private car. For example, aside from actual repairs, a broken rental car is also costing the car rental company money in lost revenue. Since your private car insurance may not cover them, be sure to read the fine print of any car rental agreement to see if any additional fees are applicable in the instance of an accident.

Always consult your personal policy if you are ever in doubt with regards to specific coverage. Speak with a PC® Insurance broker to explore different options for private car insurance coverage to see what works best with your situation.

Here are some common car insurance packages available with vehicle rental agreements in Canada:

i. Liability Insurance

As its name suggests, this type of insurance covers personal liability in the event of a crash causing damage to another person’s car or property. Check your personal car insurance policy to see if you are already adequately covered for personal liability.

ii. Personal Effects Coverage

This type of coverage does not deal with the car rental itself, but rather the contents within the vehicle. Often used for moving, this type of coverage might already be present in an existing renter or home insurance policy.

iii. Personal Accident Insurance

If you are hurt in accident or have medical bills as a result of an accident, this type of insurance covers you. If you already have private health insurance or personal injury protection in your private car insurance policy, this type of additional coverage may be redundant.

iv. Loss-Damage Waiver

If the rental car is damaged or stolen, the Loss-Damage Waiver covers the costs of replacement or repairs. This waiver is standard with most rental car insurance policies and should be read carefully and cross-examined with your private policy. You might be surprised to see what additional things are covered and what is not covered.

v. Roadside Protection

Sometimes worked into the Loss-Damage Waiver, roadside protection covers you in the instance you encounter mechanical issues or other roadside problems, like running out of gas or losing the car rental’s keys. Since roadside assistance can be expensive, double-check to see if services to a rental car are covered under your private policy.

How to make a claim

Call 1-877-251-8656 to speak with a Claims Advisor.

Renewing your policy

Call 1-877-251-8652 for information regarding policy renewal.

Buying a new policy

Call 1-866-660-9035 for information on obtaining a quote.

Need help?

Take a look at the top 5 FAQs:

  • What are my choices in terms of auto coverage?

    What are my choices in terms of auto coverage?

    If you own or drive a vehicle in Canada, you must be insured. Different provinces have different requirements, but the four mandatory elements of auto insurance are:

    1. Liability - if you cause an accident and someone sues you
    2. Accident benefits - if you or someone in your vehicle is hurt in an accident
    3. Direct compensation – property damage (Ontario only)- if your vehicle gets damaged (and it's determined you're not at-fault or only partly at-fault)
    4. Uninsured motorist - if you're in an accident with an uninsured or hit-and-run driver
  • How do I reduce my insurance costs?

    How do I reduce my insurance costs?

    There are several things you can do to reduce your insurance premium costs:

    1. Work on your driving record
      Here's an easy, yet effective way to bring down your insurance costs: build a consistent accident and conviction-free track record with an insurance company.
    2. Choose your automobile wisely
      Do your research before you invest in a new car. Read consumer reports, and check with your insurance company to find out which cars tend to be targets for theft and vandalism. Remember, if you buy a car with a high theft rate, your premium will be higher.
    3. Adjust how you use your car
      By adjusting the way you use your vehicle, you can also bring down the cost of your insurance rates. If you live in a metropolitan area:
      • can you take the subway, train or bus to work?
      • has your job changed, or have you moved recently?
      • do you use your automobile to drive a short distance to work?
      • does your vehicle get used for low annual kilometers?
        If you answered yes to any of these questions, you may be entitled to lower insurance costs. Another consideration is whether you let others use your car. It is sometimes possible to exclude certain high-risk drivers from your policy so that good drivers are not penalized with a higher premium.
    4. Choose a higher deductible
      If you choose a higher deductible up front, your premiums will be lower.
    5. Review your coverage
      Take a closer look at your coverage to make sure you're not paying for things you don't need.
  • How can I earn PC Optimum points?

    How can I earn PC Optimum points?

    When you use your President's Choice Financial Mastercard to pay your PC auto insurance premium, you'll get 20 PC Optimum points per dollar of your premium.

  • Are other drivers insured to drive my car?

    Are other drivers insured to drive my car?

    Yes, as long as he/she has your permission to drive the vehicle, has a valid driver's licence and has not been specifically excluded from driving the vehicle. However, all licensed drivers in your household must be listed on your policy—regardless of how often they use your vehicle.

  • What is a deductible?

    What is a deductible?

    A deductible is the amount that you agree to pay towards the repair or replacement of your vehicle before your insurance pays the rest. You choose your deductible amount when you purchase your auto insurance. The higher your deductible, the lower your premium.

See all Auto Insurance FAQs


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