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Rental Car Insurance in Canada: The Basics

Although renting a car seems like a great idea to run some local chores or have a means of transport when you’re on holiday, people rarely think about rental car insurance. With most rentals in Canada, you’ll be given the most basic insurance with each vehicle, third-party liability coverage.

This policy is to cover other vehicles that you may collide with. For instance, if you hit someone else’s car with your rental, the vehicle you’ve hit will be covered by your damages, but for your car, you’ll have to pay for the repairs.   

However, before purchasing insurance before when you get there or from the dealer, you may already be insured through the below:

  • current car insurance
  • travel insurance
  • credit card insurance

Before you decide to rent a car, if you have any of the mentioned insurances, be sure to read through the policies as they may cover you on a greater level. Just by accumulating a small amount of knowledge about your current insurances, you may be able to save yourself around $40 a day on the cover.

4 Types of Rental Car Insurance for Canada

Currently, there are four main types of car insurance you can choose from while driving in Canada.

Each has its own benefits and price ranges that are more suited towards different vehicle types, varying from your everyday car to a fancier sports car rental.

Third-Party Liability Coverage

Third-Party Liability Coverage is the most basic insurance you can opt-in for a while driving a car in Canada and is normally offered within each vehicle’s rental price.

Third-party Liability coverage insures you from any damage you may cause while driving the vehicle to people or their property. This insurance is the minimal legal requirement to drive a car around Canada.

However, be careful when choosing this coverage as they normally have large excesses depending on what insurance broker you choose.

Collision and loss damage waiver

Collision and loss damage waiver typically insures you a little bit more than third-party liability coverage by protecting the actual rental car if any damages were to occur on it. These damages would include fire, theft, or other common accidents.

Personal accident insurance

A personal accident insurance will cover any medical costs that may be associated with the accident from you or your passengers.

Personal effects coverage

Unlike the other insurances mentioned above, this insurance covers your property that is in the rental vehicle. If your vehicle is stolen or broken into, all the goods inside of the car are insured. A lot of the time, car rentals in Canada will offer this insurance within the car’s price.

As you can see, there is plenty of rental car insurance to choose from in Canada. Each offers a different price range and benefits depending on your current situation.

Always remember, before renting a car, look to see if you’re already covered either through your current car insurance, travel insurance, or through your credit card.

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Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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