Do you actually need rental car insurance?



The process of renting a car can be quite simple.  You will find many easy to use websites, rental car kiosks in airports and train stations, and even online services which compare rental car agencies to find the best rate.  Then, after you have selected your car and you are ready to hand over your credit card, you are presented with the idea of rental car insurance.  Unfortunately, this decision requires more thought than a quick signature.  The rental car agency will surely offer you choices of coverage, but you may already have coverage in place on your auto policy or your credit card.

Your Ontario Automobile Insurance Policy (OPCF 27)

The Ontario Policy change Form 27 (also known as OPCF 27), is an endorsement which you may have already added to your personal auto policy.  This endorsement provides a specific amount of coverage for automobiles you have rented in your own name.  Coverage applies to these vehicles when they are operated, used, stored or parked in Canada or United States.  Here are a few things to keep in mind regarding OPCF27:

  • Coverage only applies to the drivers listed on your insurance policy. For example, if someone other than a listed driver on your policy were to take the rental car and damage it, this coverage would be void. Imagine a case where the car is stolen, the thief damages the car, and it is recovered. Technically, damage was caused by an unlisted driver and you may be personally responsible.
  • There are limits as to the weight of the rental car, length of time it will be rented, value of the rental car among other things.
  • Coverage is only for Canada and the United States. This means that if you were to rent a car in France, coverage would be void.

Be sure to check with your broker to see if you have OPCF27 coverage and the details of that coverage before you rent a car.  Remember to ask about the coverage limit, applicable deductibles and any exclusions.

Rental Car Coverage with your Credit Card

Some credit card companies offer free rental car insurance built into their credit card .  Each company is different and will likely have different rules.  If you are going to use your credit card to cover damage to your rental car, be sure to contact your credit card company and ask for the most recent wordings relating to their rental car coverage.  Be sure that you fully review these wordings, paying special attention to coverage limits, deductibles, and exclusions.

Rental Car Insurance through the Rental Company

 Rental car companies will offer their own rental car insurance which you can purchase for an additional charge.  Again, be sure to read the fine print, as each company offers a different package.  They often offer $0 deductibles, but be sure to pay attention to the exclusions.  For example, some rental car companies do not cover damage occurring when driving on unpaved roads.

Renting a car is easy.  Deciding on the proper rental car insurance is not.  There are many forms of rental car insurance with very different policies.  Be sure to contact your broker before you rent a car.  If you don’t have a broker, feel free to contact us and we would be happy to help.

Check with your insurance broker before deciding on rental car insurance.

Check with your insurance broker before deciding on rental car insurance.