Know insurance options when you’re renting a car
Three ways to get coverage, but not all of them are equal
Some car rental deals seem too good to be true.
Factor in the cost of insurance, up to $40 per day depending on the coverage, fees for additional drivers, fuel, extra mileage charges and roadside assistance expenses, and it can cost way more than double the advertised rental price.
As insurance alone can turn a $99 weekend getaway package into less of a sweet deal, it’s wise to look at your options before you hit the car rental counter.
Rental agency coverage
Check the extent of the coverage. Policies vary with lower rates carrying higher deductible costs, while premium plans may offer zero deductibles.
Rental car damage protection insurance (collision damage waiver) covers the value of the vehicle, but doesn’t carry personal coverage for injury or loss of property. Some agencies offer additional policies, with a range of fees, for liability, medical costs and coverage of personal effects.
There are also exclusions to the coverage, such as in the event of an accident or damage done due to driving on unpaved roads, if the car is taken out of the province, state or country not specified in the contract, or if the vehicle is overloaded or used to tow a trailer.
Your credit card may also be dinged a daily rental fee for the period the car is being repaired, and the policy likely won’t offer protection in the event of a lawsuit if you are found to be at fault in an accident. It’s all in the fine print.
Personal car insurance coverage
Most auto insurers offer a special rider (add-on) providing accident and liability coverage on car rentals and, while it can be valid across Canada, it may have restrictions when driving in the U.S. Also, it very likely won’t extend to Mexico.
Coverage can cost from $15 to $50 extra per year, but be aware that if you are at fault in a rental car accident your insurance rate will increase. If you have a rent- al car accident on a trip and your own car is stolen at home while you are travelling the insurance may only cover one claim.
As the car must be rented in the name of the person insured on the personal policy, it may not cover another driver of the rental car.
Although your collision and comprehensive auto insurance coverage may extend to cars you rent, it’s likely limited to the value of your own car and not a higher-end vehicle.
Your auto policy may only cover a rental car while on a vacation but not for commercial or business use, and it won’t include the loss of personal property. That’s usually covered on your homeowner/ renter insurance. Review your contract or ask your insurance broker for details.
Credit card coverage
If your credit card provides insurance coverage on rental cars, that $99 weekend getaway deal may be a bargain after all, but once again; certain conditions apply.
Premium cards at “gold” or “platinum” levels, which come with an annual fee, generally provide rental car insurance coverage.
You have to rent it on that specific card and sometimes with specified rental firms — a good reason to have more than one credit card. A rental agency with your card info can charge the cost of repair to your account, leaving you to hash it out with the card company later.
Contact the credit card company and ask for coverage details and limitations before you rent, and go with the one that offers the best protection.
Most credit cards won’t insure luxury or exotic vehicle rentals.