If you are traveling in Canada or the USA for vacation and renting a car, you will be asked if you would like to purchase insurance for the rental car when you pick it up.
For around $20/day, the rental company will cover you for losses to the rental car such as damage caused by an accident, theft, vandalism, etc.. However, you may already have this coverage on your own car insurance policy.
Chances are if your car insurance qualifies for it (more on that below) and your insurance company has done their job properly, you do not need to take the coverage offered by the rental company.
The coverage on your insurance policy that covers rental cars is called OPCF27 “Damage to non-owned autos” and covers the following:
- Damage to the rental car in the event of an accident (up to a certain limit, usually $25k or $40k)
- Cost of rental car if stolen (up to a certain limit, usually $25k or $40k)
- Liability while driving the rental car (up to your liability limit)
- Accident benefits you may need if you have an accident while driving the rental car
- Uninsured auto coverage (if somebody injures you and they don’t have insurance, your insurance will step in)
This coverage on your policy is usually combined with a few other coverage options and costs around $50-$75 per year. This covers you for any rental car you rent for pleasure use throughout the year with no need to inform your insurance company.
One important note is that every driver who will be driving the rental car MUST have this coverage on their insurance policy. If they do not, for whatever reason, you must purchase the rental company’s insurance coverage.
To qualify for OPCF27 on your insurance policy, you must have full coverage (collision & comprehensive or all perils coverage).