I'm Renting A Car, Do I Need Insurance?

Yes, of course I do. The question really becomes, do I need to accept the “Collision Damage Waiver” coverage that most rental car companies offer at the counter, and what are the consequences if I decline?

The Collision Damage Waiver is intended to protect the customer for property damage incurred to a rental vehicle. Rental car companies typically charge a daily rate on top of the rental fees applicable to the vehicle. A customer should be aware of other alternatives though.

Since most rental car reservations are made by way of credit card, a customer should determine what coverage may be available through their credit card company. That means reading the fine print in the booklet that comes with the card. Often times, if the entire cost of the rental car is paid with the credit card, AND the rental car coverage is declined, the credit card company will provide the Collision Damage Waiver coverage. Care must also be taken to ensure that the credit card company has approved the rental car company that you are using in the customer agreement that comes with the credit card.

Additionally, if the person renting the car has his or her own Ontario automobile policy, it is possible to insure a rental car against property damage under that policy as well.

An optional endorsement, entitled the “OPCF-27” or “Rental Vehicle Insurance Endorsement” provides such coverage. As is the case with most policies, this endorsement is subject to certain exclusions and limitations. For instance, the OPCF-27 only applies to non-owned automobiles in Canada and the United States. For those travelling internationally, other coverage must be obtained. That makes the credit card option an attractive one.

Another option is a Personal Liability Umbrella Policy or “PLUP”, which many insurers offer together with standard automobile policies. Often times such a policy will respond to claims where the standard automobile policy does not.

When renting a vehicle it’s better to be safe than sorry. Check with your insurance company or broker for details of what is available, and what makes the most sense for you.