Rental Car Insurance 2024: How it works + free quotes
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Discover the methodologyEver wondered what's included in rental car insurance and if it's worth it? We've got you covered! From understanding the basics of rental car insurance to diving into different coverage options and even exploring credit card coverage, we'll walk you through it all.
Whether you're planning a road trip or just need a rental for a few days, knowing the ins and outs of car rental insurance can save you from unexpected hassles. Let's get started on making your rental experience smoother and safer.
To make things simple for you, we've also created a tool to explore the top rental car insurance Canada options and get you personalized quotes right here.
Rental Car Insurance Canada: 6 Key Takeaways
- Rental car insurance in Canada is not mandatory.
- Before renting, check if your personal car insurance or credit card covers it.
- Costs vary based on coverage type, rental company, location, and vehicle type.
- Understand policy details, exclusions, and deductibles to maximize benefits.
- Basic coverage typically includes collision damage and loss damage.
- Provincial plans like MPI rental car insurance and ICBC rental car insurance are available too.
What is rental car insurance?
Rental car insurance also referred to as car rental insurance is a temporary insurance policy that you can purchase to cover yourself in case of damage or theft of the rental car.
It is not mandatory, but it is highly recommended, as the rental company's basic insurance may not provide enough coverage. There are different types of rental auto insurance available — read the policy carefully before you purchase it.
Here are some common types of coverage:
- Collision damage waiver (CDW): This covers damage to the rental car, regardless of who is at fault.
- Loss damage waiver (LDW): This is similar to CDW, but it also covers theft of the rental car.
- Personal liability insurance (PLI): This covers you and your passengers for injuries or property damage that you cause to others while driving the rental car.
- Uninsured motorist insurance (UM): This covers you if you are hit by a driver who does not have insurance.
You can also purchase additional coverage, such as roadside assistance, which can help you if you get a flat tire or have other car trouble.
But before you choose a policy, make sure to compare various plans to get the best deal. You can do it right here using our free tool below. Get rental car insurance quotes based on your unique needs in no time. It's free, online, and instant.
Compare Canada's best car insurance plans
What does rental car insurance cover?
As basic coverage, most plans cover CDW and LDW. In addition, you get Third-Party Liability (TPL) coverage, which covers injuries or property damage you cause to others while driving, with minimum required limits set by the province.
Additional rental car insurance coverage (may require purchase):
- Personal Accident Insurance (PAI): Covers medical expenses for you and your passengers in case of an accident.
- Personal Effects Coverage: Covers personal belongings stolen from the car.
- Roadside Assistance: Covers services like towing, tire changes, and battery jumps.
- Waiver of Deductible: Reduces or eliminates your deductible for damage or theft.
- Glass/Tire Coverage: Covers damage to windows, tires and rims.
How does rental car insurance work?
Here's a detailed explanation of how rental auto insurance works in Canada:
Before you rent
- Check your auto insurance: Many personal auto insurance policies extend some coverage to rental vehicles in Canada. Contact your insurer to understand your specific policy's details and limitations.
- Consider rental car insurance credit card coverage: Some credit cards offer primary or secondary rental auto insurance. Primary coverage acts as your main insurance, while secondary coverage kicks in after your insurance. Review your credit card agreement thoroughly for limitations and exclusions.
At the rental agency
- Understand mandatory insurance: Each Canadian province has its own minimum liability insurance requirements for rental cars. The rental agency will include this basic coverage in your rental price.
- Evaluate additional coverage options: Rental agencies typically offer various optional coverages like CDW/LDW, PAI, personal effects coverage, roadside assistance, etc. Carefully assess your needs and budget before purchasing any additional coverage.
- Read the policy documents: Don't skip this crucial step! The policy details will outline what's covered, exclusions, deductibles, and other important information. Ask clarifying questions if anything is unclear.
During your rental
- Drive responsibly: Even with insurance, accidents can be stressful and inconvenient. Following traffic rules and driving cautiously minimizes risks.
- Report any incidents promptly: In case of an accident, theft, or damage, inform the rental agency immediately and follow their instructions. Keep all relevant documentation.
After your rental
- Return the car in agreed-upon condition: Damage beyond normal wear and tear might involve charges even with insurance.
- File a claim if necessary: If you used insurance during your rental, follow the instructions provided by the rental agency or your insurance company for filing a claim.
<strong>Some important things to remember</strong>
- Deductibles: Most coverages have deductibles, meaning you'll be responsible for a specific amount before insurance kicks in. Choose a deductible you're comfortable paying. Read our guide on car insurance deductibles to know how you can save.
- Exclusions: Carefully review the policy for exclusions like specific activities (off-roading), locations, or vehicle types not covered.
- Multiple coverages: If you have coverage from multiple sources (personal insurance, credit card, purchased option), understand their hierarchy and potential overlaps to avoid paying twice.
How much is rental car insurance?
The cost varies greatly depending on several factors, such as:
Type of coverage:
- Basic mandatory coverage: This varies by province but typically starts around $10-$20 per day.
- Optional coverage: Prices vary widely depending on the type and provider. Here are some general ranges:
- Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW): $20-$50 per day
- Personal Accident Insurance (PAI): $5-$20 per day
- Personal Effects Coverage: $5-$15 per day
- Roadside Assistance: $5-$10 per day
- Waiver of Deductible: Varies significantly, often expensive
Other cost-affecting factors include:
- Rental company: Different companies have different pricing structures and may offer discounts or package deals.
- Location: Rental car insurance can be more expensive in major cities and tourist destinations.
- Length of rental: Prices are often per day, but some companies offer discounts for longer rentals.
- Type of vehicle: Luxury vehicles typically have higher insurance costs.
- Your age and driving record: Younger drivers and those with poor driving records may pay more.
Also, some personal car insurance policies offer coverage for rental vehicles in Canada. Check with your insurer for details. Similarly, some credit cards offer rental auto insurance, but terms and limitations vary significantly.
If you want to get accurate and personalized quotes for how much is car rental insurance, you can use our comparator. Just fill in some basic details and get quotes in minutes.
Compare Canada's best car insurance plans
What are the best options for rental car insurance?
Your personal car insurance may cover rental cars, depending on your policy and regional insurance regulations. In Canada, many policies extend your personal vehicle's coverage (like liability, collision, and comprehensive) to rentals. Always check your policy or consult with your insurer to verify coverage and any conditions that apply.
There are lots of options for exclusive rental auto insurance in Canada. Some of them are private companies while others are provincial public insurers. There are even some credit cards that offer the same coverage.
Here are some of the top provincial options that you can consider:
MPI rental car insurance
Manitoba Public Insurance (MPI) provides Rental Vehicle Insurance coverage at a substantially lower cost than most private rental companies. Here are the key points.
- Comprehensive and Cost-Effective: Offers extensive coverage for rented or borrowed vehicles in Canada and the U.S., including liability up to $10 million and damage coverage, at lower rates than rental companies.
- Flexible and Affordable Rates: Rates start at $2 per day in Manitoba, with a $200 deductible on vehicle damage. Coverage is available for periods from three to 90 days.
- Wide Eligibility: Open to Manitoba residents with a valid driver's license. Covers the policyholder and any authorized driver without the need to list all drivers. Excludes certain vehicle types and uses.
- Alternatives and Recommendations: While Manitoba Public Insurance provides the most comprehensive and affordable option, alternatives include rental company waivers, credit card insurance, and your own Autopac coverage. However, these may offer less protection or come with higher costs.
ICBC rental car insurance
Like MPI, the Insurance Corporation of British Columbia (ICBC), a provincial Crown corporation in British Columbia, provides rental car insurance options at an economical rate.
- Affordable and Comprehensive: ICBC offers rental vehicle coverage for vehicles rented in Canada and the U.S., at rates far more affordable than most rental companies. Coverage includes liability, accident benefits, underinsured motorist protection, collision, comprehensive, and loss of use, with daily rental rates up to $300 CDN in Canada and USD 250 in the U.S.
- Flexible Purchase Options: Available as part of ICBC's RoadStar or Roadside Plus packages, which could be ideal even for short trips. Coverage can also be bought separately for $10 per day. Consult your Autoplan broker for details on eligibility and costs.
- Pre-Rental Considerations: Verify with your rental company that they accept the Autoplan Rental Vehicle Policy to avoid potential issues like a higher deposit or the need for proof of coverage.
- Eligibility and Limits: Check coverage limits and vehicle eligibility with your Autoplan broker or through ICBC's insurance brochures. Those with RoadStar or Roadside Plus packages already have rental vehicle coverage included.
Here are some private providers for rental car coverage.
Allianz rental car insurance
The OneTrip Rental Car Protector from Allianz Global Assistance offers comprehensive coverage up to $50,000 for a nominal fee of just $11 per day. Designed to provide peace of mind, this coverage is effective globally, with very few exceptions, ensuring you're protected almost anywhere you travel.
Bonzah rental insurance
Bonzah offers rental car coverage up to $35,000 for damage or theft, and up to $1 million in liability insurance, with no deductible. Benefits include up to $500 for personal item theft or damage and optional roadside assistance for travelers over 100 miles from home. Eligible to drivers 21+ with a valid license, starting at $7.99/day.
Sure rental insurance
Sure offers up to $100,000 in theft or damage coverage for rental cars, including protection for personal effects inside. Additional benefits cover flat tires, wrong fuel usage, lost key reimbursement, and towing charges. Pricing begins at $7.99 per day.
If you want to explore what car insurance could cost based on your unique needs, you can do it right here. Use our free tool below to compare personalized car insurance quotes and coverage from Canada's top providers.
Compare Canada's best car insurance plans
Automobile associations
- BCAA: Offers various plans with different coverage levels and deductibles. Primarily for BCAA members in BC.
- CAA (Various Provinces): Similar to BCAA, offers different plans with varying coverage and deductibles. Specific availability and details depend on the CAA club in your province. Check out our complete guide on CAA car insurance.
- AMA (Alberta): Provides various coverage options for AMA members in Alberta. Check specific details and availability with AMA Alberta. You can compare coverage of top car insurance in Alberta here.
Good to know
Car insurance and rules may vary from one province to another. If you're looking for more details on rental car insurance Ontario coverage options, you can check out our guide on Car Insurance in Ontario.
Does my credit card cover rental car insurance?
It depends on your credit card. You can check your policy to quickly review the coverage or get in touch with your agent.
Here are popular credit cards that cover rental car insurance in Canada:
| Option | Coverage Amount | Rental Duration |
|---|---|---|
| TD Visa Infinite rental car insurance | Up to $65,000 | 48 days |
| Westjet Mastercard rental car insurance | Up to $65,000 | 48 days |
| PC Mastercard rental car insurance | Varies by card (typically $50k-$75k) | Varies by card (typically up to 31 days) |
| RBC Credit Card rental car insurance | Varies by card (primary or secondary) (RBC avion rental car insurance is typically included if bookings are made by credit card. Often includes of Collision Damage Waiver or Loss Damage Waiver (LDW)) | Varies by card |
| BMO Mastercard rental car insurance | Up to $50,000 (The BMO world elite mastercard rental car insurance may cover physical damages to the rental vehicle, theft, and some additional charges imposed by the rental agency) | 31 days |
Is there Amex rental car insurance?
Yes, there is. One of the top options you can get covered is through Amex cobalt rental car insurance. When you pay for your rental car in full with your Card, you can be protected against theft, loss, and damage for vehicles with a Manufacturer's Suggested Retail Price (MSRP) of up to $85,000, for rental periods of 48 days or shorter. To benefit from this coverage, all you need to do is refuse the Collision Damage Waiver (CDW), Loss Damage Waiver (LDW), or any similar protection the car rental company offers.
What are the FAQs on rental car insurance?
How long will insurance pay for a rental car after an accident?
The duration insurance will cover a rental car after an accident varies by policy and insurer, typically ranging from a few days to several weeks. Most standard policies have a limit, either in terms of a maximum dollar amount or a set number of days (e.g., $30 per day for up to 30 days). Check your specific policy details or consult with your insurance provider for the exact terms of your rental car coverage after an accident.
Can you buy rental car insurance online?
Yes, several companies offer the option of buying rental car insurance online. For example, AMA lets you buy car rental insurance online in a few quick steps. Typically, most customers buy rental car insurance right before or at the time of picking up the vehicle.
What happens if you crash a rental car without insurance?
If you crash a rental car without insurance, you could be held personally responsible for all damages to the rental vehicle, as well as any liability for injuries or damage to other vehicles and property. This could result in significant out-of-pocket expenses. Additionally, the rental company may charge you for loss of use and other related fees. It is therefore highly recommended to buy a car rental insurance policy while renting.
