Rental car insurance is confusing, to say the least. When you rent a car there are numerous papers to sign, and there’s usually not a lot of time to understand them all properly. Not to mention that each car rental company has different rules and standards, and they very province by province.
Everyone wants to make sure they are covered for their rental car, but purchasing insurance at the place of rental may not be necessary. It all depends on your circumstances.
How Rental Car Insurance Works
Rental car companies generally offer four different types of insurance at the desk. They are a collision and loss damage waiver, liability insurance, personal accident insurance, and personal effects coverage.
- Collision and loss damage waiver: This works a lot like a combination of comprehensive and collision coverage for regular car insurance. Comprehensive coverage provides for repairs for damage caused to your vehicle by perils other than collision or upset, such as vandalism, flood, hail, theft, windshield damage and fire. Collision coverage will pay for damages to the rental vehicle should you be in an accident. It’s important to remember, however, that this type of rental car insurance will not typically cover for repairs to the other vehicles involved in the accident – even if it is not your fault. Ensure to inquire about the scope of this particular waiver.
- Liability insurance: This coverage will provide for legal fees and reparations if you injure another person and/or damage property while driving your rental car. Since legal fees can easily run into the millions, liability insurance can protect you from financial ruin.
- Personal accident insurance: Personal accident insurance is specifically targeted to provide for medical bills for injuries or a lump sum payment if a death occurs to you or any passengers in your vehicle.
- Personal effects coverage: Often bundled as part of personal accident insurance, personal effects coverage will pay for your personal property if it is lost, damaged, or stolen while in your rental car.
Does My Regular Car Insurance Work for My Rental Car?
Many people assume that their auto insurance will follow them no matter what vehicle they are driving. But this is not necessarily the case. In order for a rental vehicle to be covered, your policy needs to include both collision and comprehensive coverage. You may also need to obtain an endorsement called an SEF 27 or “Legal Liability for Damage to Non-Owned Automobile” endorsement, which transfers the coverage from your personal vehicle to the rental vehicle. If you are not sure about how your car insurance policy will cover you for a rental vehicle, definitely give your company or your broker a call before taking possession of the rental vehicle. Also be sure to ask about the deductible. Sometimes deductible for rental cars vary from the deductible you have on your own vehicle.
What About Rental Car Insurance Coverage Through My Credit Card?
Part of the many, many annual fees we all pay for our credit cards usually includes some form of rental car collision and loss insurance. There is generally a cap, however, which you should ensure to check through your credit card company. Luxury vehicles may also be excluded.
To be covered you just need to pay for the rental car with your credit card, but definitely double check with your credit card company before relying on this type of insurance, however. It’s better to be safe than sorry!
Can I Decline Any Kind of Coverage at the Rental Car Office?
If you have checked to see if both your regular car insurance and your credit card provide rental car insurance coverage, and they do, you can feel confident declining the collision and loss waiver offered by the rental car company.
Liability coverage is absolutely essential, however. Again, if your regular car insurance and your credit card provide liability insurance through your contracts, you may decline this coverage. However, for your own peace of mind (and the fact that it is not usually overly expensive), it’s a good to consider purchasing it. But do check, however, to see if it is included as part of the rental, which is mandated by several provinces. It could be that what the rental car company is offering is supplemental to that, providing for coverage over and above the basic offering.
If you have a home insurance policy, personal effects coverage may also not be necessary. Home insurance generally covers for personal effect even when travelling, but again it’s worth a call to your insurance provider or broker to ensure this is the case. Additional travel insurance may cover any perceived gaps in your coverage.
Trust Lane’s for All of Your Insurance Needs
Lane’s Insurance is a certified brokerage covering all of Alberta. We work for you, not the insurance companies, which means that not only can we mitigate on your behalf and ask the right questions so you get the answers you need, we can also shop around for you from the numerous policies provided by the respected providers we work with to get you better coverage for less. Contact us at our Calgary, Edmonton, Banff or greater Alberta offices to see what we can do for you.