You’ve just rented a car and the service agent asked you if you need car insurance. Is this just a money-grab or do you really need it?
Car rental insurance usually covers all or part of the costs of repairs or loss of a vehicle in the case of a collision or theft. You may have coverage with your personal auto insurance company (if you own a car already) or through your credit card, but not all policies offer full car insurance coverage. Whether or not you think you’re already covered, here are the questions you need to ask yourself to find out if you need to purchase additional car insurance or not.
1. Who is covered by your car insurance policy?
Basic car insurance usually covers the principal driver, but not all policies cover additional drivers. If you’re planning on splitting driving duties with another person, you need to know if everyone is covered. If you’re the only one insured, but another driver is in an accident with your rental vehicle, the collision damage won’t be covered.
2. What types of vehicles are insured?
The type of vehicle you are renting matters. Most policies only cover certain types of vehicles, so find out if the one you plan to rent is covered under your policy. Trucks, motorcycles, and cargo vans may not be covered. Also check if your policy applies to luxury vehicles or not. Your policy may also cover no more than a certain number of passengers.
3. What is the maximum rental duration that your policy will cover?
Similarly to travel insurance, car rental insurance usually covers rentals only up to a certain number of consecutive days. They also have specific rules for rental renewals. If you’re renting for a long period of time, you may need to bring back a vehicle and rent out another more than 24 hours later, for your coverage to be effective.
4. In which countries are you covered?
This is crucial! Often we go travelling and expect our coverage to apply wherever we go, but it’s definitely not a given. Make sure your coverage applies to every country you plan on driving through.
5. Does your policy cover third party liability?
Third party liability covers loss or damage related to a third party involved in an accident. This includes the death or injury of another person involved in an accident as well as property damage. This type of insurance coverage is important because someone could sue for damages or injury. If you own a car in Canada, most often your own car insurance will already cover this across Canada and the United States. However, many credit cards do not cover third party liability. When renting abroad, find out if this type of insurance is mandatory as some countries require it by law.
6. What conditions must be met for the coverage to extend to a specific car rental?
This question is especially important when your coverage comes from your credit card company. Often, you’ll need to pay for the entire amount of the car rental on the one card. The cardholder may need to be the one to take possession of the car and be the main driver. Find out exactly what the conditions are to make sure your policy covers you.
7. Up to what amount are you covered?
Some policies only protect you up to a certain amount of damage. If this is the case, you may want to purchase additional insurance as you will be responsible for any costs incurred that go beyond the amount covered by your insurance policy.
If you’re not sure or are having trouble interpreting your car insurance policy, call up your insurance provider. Always better to be safe than sorry.