What to know about insuring a rented vehicle

A laptop open to a car rental form

Insurance can feel like an afterthought when renting a car. As the last box to check off at the rental desk before hitting the road, few take the time to read the fine print on their coverage. Whether you’re opting in to the insurance provided by the rental car company, or going it alone with your own car insurance or credit card coverage, knowing the details can save you money, and trouble, down the line.

Car rental company insurance

Car rental companies are happy to tack auto insurance coverage onto your rental rate for a fee. Most rental companies offer varying amounts of coverage, from basic collision to roadside assistance. At its most basic, signing a collision damage waiver will prevent you from being held liable if your rental car is damaged or stolen. It will not cover injuries or personal effects left in the car.

As is the case with all insurance, the higher the deductible, the less you'll be charged by the rental company. Premium plans may offer $0 deductibles, but risk being quite costly to the consumer.

If you plan to take your rental vehicle out of the province or country, make sure your coverage will still be valid . Many car rental insurance policies are void in other provinces, so you’ll want to avoid paying fees for insurance you won’t need.

One major benefit of opting into insurance directly from your car rental company is that you’re less likely to be charged loss of use fees, should your rental car need to be taken off the road for repairs. Some rental companies will charge you a fee per day to recoup the losses.

Personal auto insurance policy

If you have personal auto insurance and plan to rent a car more than once a year, it may make sense to add legal liability for damage to non-owned cars to your personal policy. This add-on will typically add an extra $15 to $50 per year to your insurance premium, so it’s a great option if you plan to rent multiple times.

To note, your rental car coverage will match but not exceed the coverage you have on your personal vehicle. If you get into an accident in a rental car that surpasses the value of your personal vehicle, you’ll only be covered for your personal vehicle’s value.

Additionally, some insurance providers will only process one claim for damages incurred at the same time. If you happen to get into an accident in your rental car on the same day that a tree falls on your personal car, they may only process one claim.

Your personal car insurance is also unlikely to cover you for large trucks or moving vans, luxury and exotic rentals, and out-of-province claims. Read the fine print or contact your insurance provider to clarify the terms of your policy.

Credit card coverage

Some credit card companies offer their clients rental car insurance, although it’s normally only premium cards with annual fees. Different credit card providers will have deals with specific rental card companies, so check with your provider before booking your rental.

Most credit card coverage will cover collision, loss, and damage. This means you’re covered for theft and damages to the car up to the cash value of the rental as well as for loss of use charges.  You won’t be covered for another person’s injuries or damage to another vehicle if you are determined to be at fault in a collision.

Credit card coverage rarely covers luxury and exotic vehicles, but it varies from credit card to credit card. Contact your credit card company to learn more about your coverage if you’re unsure.

It’s always best to be informed when it comes auto insurance.  There’s no harm in asking for specifics from rental agent if you choose to purchase directly from your car rental company. If you choose to go it alone, connect with your auto insurance provider or credit card company to ensure you’ll have adequate coverage for the duration of your rental.

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