Vehicle rentals and insurance: what you need to know

Which auto insurance should you choose?

If you’ve ever rented a car, you know that insurance can really drive up your bill—sometimes insurance costs almost as much as the rental price. But it’s very important to have damage insurance—with or without a deductible—and civil liability insurance for injury and property damage.

Should you buy the rental agency’s insurance? Perhaps, if you don’t have a choice, but there are other options for insuring a rental vehicle.

Personal auto insurance

If your personal auto insurance includes Endorsement Q.E.F. 27 “Civil Liability for Damage to Non-Owned Automobiles,” you are covered for damage to the rental, but only in Canada and the U.S. It’s exactly the same as your coverage on your own vehicle, including the same options and deductibles. If you don’t have the endorsement, check with your insurance company to find out how much it would cost. It is included in the No-Stress Policy, available exclusively to CAA-Quebec members.

Endorsement Q.E.F. 27 covers cars, motorhomes (RVs), travel trailers and pop-up campers, utility trailers, and certain utility vehicles such as moving trucks. However, coverage does not extend to rented motorcycles or three-wheelers such as Slingshots or Spyders. For these vehicles it’s best to take the insurance offered by the rental company.

Your auto insurance also includes civil liability insurance, which covers any injury or property damage you cause. But the amount of coverage may not be sufficient. Increase it to at least $2 million for the duration of your trip. You’ll have better protection in the event of a claim, especially in the U.S., where lawsuits are no laughing matter.

If you rent a car outside of Canada or the U.S., you will need another type of insurance, since your auto policy does not cover you outside these two countries.

For more information on the coverage available for road travel in the U.S., check out Heading for the United States by road? Travel with peace of mind!

Insurance provided by your credit card

If you pay for the rental with a credit card, check to see if it offers insurance. Credit cards often provide damage insurance for rental vehicles. Civil liability coverage is rarely included.

Check the scope and conditions of the insurance. Is it valid for a limited time? Does it cover vandalism? Do you need an International Driving Permit (which you should have, regardless)? Do you have to put the entire rental on your credit card? Does your destination or the duration of your trip fall under the exceptions? If the coverage is not sufficient, you’ll have to find another solution.

Insurance from a car rental agency

Insurance from car rental agencies is often costly. You should decline it if you are sufficiently covered by your auto insurance or credit card. But if you don’t have a choice, it’s often cheaper to choose a prepaid plan that you buy before your leave.

Depending on your other insurance, you may only need civil liability coverage or damage insurance for the rental. If that’s the case, remove the coverage you don’t need to make sure you don’t pay twice. In Europe, for example, both insurances are usually included in the base price of car rentals.

Coverage for damage to rental vehicles with travel insurance

If you want to rent a vehicle in Europe, Mexico, or elsewhere in the world, your travel insurance may be another option.

Some travel insurance policies, including Travel Insurance offered by CAA-Quebec, offer optional coverage for damage to rental vehicles. The coverage can be purchased at any age for a maximum of 60 days. It provides $75,000 worth of coverage for collision, theft, fire, and vandalism and does not have a deductible. It does not cover civil liability.

Renting a vehicle with a car-sharing service

Want to use a car-sharing service such as Turo? Before completing your reservation you will have to choose the coverage that suits you or decline it. The options vary depending on the country where you rent the vehicle. Make sure you understand the scope of the coverage before making your choice.

If you have Endorsement Q.E.F. 27, your personal auto insurance may be sufficient. The coverage offered through your credit card may only be valid for bookings made through “traditional” rental agencies. Check with your credit card company for details.

Have you been injured in a car accident?

All over the world, whether or not you are at fault, you are covered by Société de l’assurance automobile du Québec (SAAQ) for bodily injuries. In the event of an accident, it covers any portion of hospitalization expenses that is not covered by Régie de l’assurance maladie du Québec (RAMQ).

You can claim all compensation to which you are entitled upon your return. Your stay must not exceed six months in the same calendar year (183 days, to be precise).

It is always advisable to take out travel insurance that includes medical and hospital coverage. It can help you avoid administrative headaches if you are admitted to a hospital abroad. Plus, you also get coverage for medical costs that aren’t related to a car accident, including repatriation expenses, which are often higher than those reimbursed by RAMQ.

Which documents should you bring on your trip?

• Car rental contract

  Keep all documents related to your car rental transaction with your other travel documents. They are proof of your agreement and booking.

  Print your rental contract and carefully read the terms and conditions regarding the time and place of vehicle pickup and return and any fees that may be charged at the agency (e.g., eco-tax, extra fees for a second driver or driver under 25, etc.).

• A copy of Endorsement Q.E.F. 27 from your insurance policy or the damage insurance for rental vehicles included in your travel insurance (if applicable)

  Keep a copy of your Endorsement Q.E.F 27 or the coverage provided under your travel insurance. The endorsement is found at the end of your insurance policy. Also, a summary of your coverage is printed on the back of your proof of insurance—the one you carry in your wallet.

• Proof of protection provided by your credit card (if applicable)

  Ask your credit card company to send you the necessary written proof.

• Phone number for your insurance company or helpline
• Driver’s licence

  Of course you shouldn’t forget your Canadian driver’s licence and international driver’s licence (if applicable). It’s also a good idea to keep information about your destination’s laws and road signage handy.

Whether you opt for the coverage provided under Endorsement Q.E.F. 27, your credit card, or your travel insurance, remember to ask for English versions of the documents. You can show them as needed.