Car rental and insurance: what you need to know

As you get ready for your upcoming trip or vacation, you might be thinking about renting a car to explore new places, whether in Canada or elsewhere. But with so many rental options available, understanding rental car insurance can be tricky. 

Are you covered by your regular insurance when renting a car? What about when you're traveling abroad? And what happens if there's an accident? Don't worry, we're here to provide all the answers to help you travel with peace of mind.

What is rental vehicle insurance?

When you're browsing for rental cars, rental car companies often offer rental car insurance. If you opt for it, you'll notice a significant increase in your bill, as it's an optional add-on. Yet, it offers crucial financial protection against accidents, theft, or damage, making it a valuable choice to prevent unexpected expenses and save money.

However, even if the rental car company offers rental car insurance, it's important to verify if your own car insurance policy covers you when renting a vehicle.

How to choose your car insurance?

First, it's important to understand that you have several options. Obviously, the car rental company will offer you the option to purchase coverage when you rent your car. However, there are other interesting choices that could not only save you money but also make your life easier. In fact, you can easily compare car insurance online.

Personal insurance plan

If you already own car insurance in Quebec, you may already have coverage for a rental vehicle. To confirm, check if your personal auto insurance includes endorsement Q.E.F. 27 “Damage to non-owned vehicles,” which replaces the “Loss and damage” coverage provided by the rental company.

If you're covered under this scenario, it means you're protected against any damage to the rental car, but only within Canada and the United States. This coverage offers the same deductible options as for your own vehicle. Just verify with your insurer that the coverage amount exceeds the value of the vehicles you may rent.

Regarding third-party liability, your personal auto insurance typically covers damage caused to others, including bodily injury or property damage. However, you should check the coverage amount, as it might not be sufficient for your entire rental period.

For added protection, especially if you're traveling outside of Canada, consider requesting additional liability coverage. In the U.S., legal claims can quickly surpass $1 million.

If you're planning to rent a car outside North America for your vacation, it's likely that your current auto insurance won't provide coverage. Endorsement 27 is only applicable in Canada and the United States, so you'll need to purchase an additional insurance policy.

Rental car insurance coverage

If you don't have a car insurance policy, the coverage offered by the lessor of your rental vehicle, although often more expensive, could simplify your life. This offers coverage against any unpleasant surprises, usually referred to as “liability insurance.” This insurance protects you in the event of damage to the insured vehicle and prevents you from being sued by the rental car company in the event of a car accident.

What's interesting, however, is that rental cars in Quebec always include liability insurance. However, you should check the amount of coverage with your rental car company, as it may not be sufficient. For example, if you're traveling in the United States, you'll need additional coverage for at least two million dollars.

If you already own a policy that includes either liability insurance or collision damage waiver, you can request only the coverage you need to avoid paying twice.

Finally, if you're traveling in Europe, be aware that their car insurance policies generally include both insurances, third-party liability coverage, and damage collision coverage, in the basic price of the car rental.

Insurance provided by your credit card company

If you're paying for your rental car with your credit card, check whether it offers coverage. Credit cards often offer coverage for damage to the rented car in the event of an accident. However, you should be aware that third-party liability coverage is rarely included.

Your credit card will usually offer car rental insurance with a collision damage waiver. This insurance protects against the costs associated with repairing a car that has been crashed, vandalized, or otherwise damaged. However, each credit card company has its own terms, so you'll need to ask several questions to make sure you're adequately covered: What are the levels of protection? Is coverage limited in time? Is an international driver's license required? Does the renter have to pay the rental in full by credit card? Are the location or duration of your trip an exception to coverage?

It's important to note that you'll absolutely have to decline the rental car insurance if you want to be eligible for credit card coverage. If you don't, your credit card issuer will refuse to indemnify you.

Consider your home insurance protection

Although it can't completely cover the losses that may result from an accident, your home insurance will offer coverage for belongings temporarily located outside your home. This means you won't have to pay for the “Personal Effects” insurance offered by your rental car insurance. Once again, make sure you have sufficient coverage.

Please note that the car seat will not be covered since it is not part of the belongings temporarily outside the home; it is always there. 

Get peace of mind before hitting the road! Start your quote now and protect your rental car adventure.

What documents should you bring during your trip?

You're finally ready to leave on your trip, and your insurance has been arranged, but you still need to make sure you don't forget anything so that you have all the information you need at hand, should the need arise.

Rental car insurance contract

Put all the documents relating to your rental transactions in a folder. Print out your rental agreement and make sure you have read all the conditions regarding pick-up times and additional charges, for example if the second driver is under 25.

Copy of endorsement Q.E.F. 27 of your auto insurance policy

Obviously, this only applies if you're traveling in North America. If this is the case, check the rest of your insurance policy for this endorsement. You'll also find a summary of your coverage on the back of the proof of insurance you usually keep in your wallet.

Proof of credit card coverage

You'll need to contact your card issuer to obtain the documents you'll need. Remember that credit card insurance applies only to the car itself, not to any damage to other cars, property, or individuals.

Information from your insurance company

If you're facing a problematic situation, you'll be very happy to have your agency's number at hand.

Driver's license

Finally, never forget your Canadian and international driver's licenses.

Everyday automobile insurance

Finally, while we're talking about a plan for a rental vehicle, it's always important to think about your day-to-day coverage. If you want to drive with peace of mind, especially in the city, you need collision and theft insurance from a reputable insurance company.

Start shopping for your Montreal car insurance, today!