Written By: Savannah Snyder, Associate and Sara Ferro, Summer Student
6 Minute Read
Introduction
Summer involves adventure and travel, and for many, that includes renting a car. What most people don’t realize is how big a role insurance coverage plays if a motor vehicle collision happens. Renters often drive without fully understanding their existing coverage or what additional coverage they may need. Understanding your insurance coverage when renting before you hit the road can ensure you and your loved ones are protected if anything unexpected happens.
Do You Need Rental Car Insurance?
Whether you need extra insurance while renting a car depends on the insurance coverage you already have. Knowing which types of insurance coverage will protect you while renting a car is extremely important. This knowledge can help you avoid being underinsured if an accident happens.
In the event you do not have a personal auto policy, or if you are renting while travelling abroad, you will likely need to purchase additional coverage from the rental car company. Rental car companies offer insurance coverage, such as a Collision Damage Waiver (CDW), which will shift the responsibility of costs for the damage to the car to the rental car company. In addition, rental companies offer Personal Accident Insurance, which provides benefits if you are injured in an accident.
On the other hand, if you have a personal auto policy, it is possible you already have sufficient coverage. However, it is important to verify your existing coverage, as gaps often exist.
What Insurance Coverage May Apply When Renting a Vehicle?
There are various sources of potential coverage, including but not limited to:
- Personal auto insurance policies
- Rental company insurance policies
- Credit card rental car insurance benefits
- Employment travel coverage
The type of coverage you are entitled to and ultimately receive will depend on the provider you select and the specific policy that they offer.
Does Your Ontario Auto Insurance Cover Rental Cars?
Before purchasing any new policies, it is important to understand your current Ontario auto insurance coverage as it may already extend to a rental car. Every Ontario auto policy includes two mandatory types of coverage: third-party liability and accident benefits. Third-party liability covers injuries or damage you cause to others. Accident benefits cover certain costs when you are the injured party, regardless of who was at fault, such as medical and rehabilitation benefits.
However, your standard auto policy will not cover all damage, such as physical damage to the rental car. To fill this coverage gap, there is an optional endorsement called an OPCF 27, officially known as, “Liability for Damage to Non-Owned Automobile(s), and Other Coverages When Insured Persons Drive, Rent or Lease Other Automobiles.” Adding an OPCF 27 to your personal auto protects you from liability if a non-owned vehicle, like a rental car, is damaged.
Before travelling, it is worth confirming exactly what your current coverage protects. Addressing this proactively, such as obtaining OPCF 27 coverage if required, can help you rent a car confidently without surprise expenses in the future.
What Does Credit Card Rental Car Insurance Actually Cover?
Credit card rental car insurance often covers the costs of any physical damage to a rental car after an accident happens. While credit card coverage can be helpful when renting a car, there are common limitations. Many credit card policies cover damage to the vehicle itself but may not provide liability or injury coverage in the event you are seriously injured or are met with a personal injury lawsuit following the accident.
What Happens if You’re Injured in a Rental Car Accident?
As mentioned above, Ontario’s accident benefits system may apply through your Ontario auto insurance if you are injured while occupying a rental car. Eligibility can depend on several factors, including your specific insurance arrangements.
Given the recent changes to the Statutory Accident Benefits Schedule that took effect on July 1, 2026, it is extremely important to confirm what accident benefits you are currently entitled to. For more information on these changes, see our blog: What’s Actually Becoming Optional Under Ontario’s New Accident Benefits Rules?
Common Misconceptions About Rental Car Insurance
The following are common misconceptions about rental car insurance and what it includes:
- The rental company’s insurance will provide full coverage.
- Credit card insurance will automatically provide coverage.
- Ontario insurance coverage does not apply when travelling.
- It is not necessary to confirm coverage before travelling.
These misconceptions often lead to significant hurdles and stress when the unexpected happens. Staying informed about your own auto insurance policy and other policies available to you will help avoid any future surprises.
What Should You Do Before Renting a Vehicle?
Before renting a car, consider taking the following steps:
- Take time to review your own personal auto insurance policy.
- Take time to review your credit card benefits.
- Ask the rental company directly about what types of coverage they can provide.
- Most importantly, understand what coverage applies if you are injured in a collision while renting a car.
Conclusion
No one plans to be involved in a motor vehicle collision, but understanding insurance coverage before renting can help ensure you and your loved ones have access to the treatment and benefits you need, while avoiding unnecessary stress and unexpected surprises if an accident occurs. If you or someone you know has been injured while occupying a rental car, contact our office today and we will help you understand how to navigate your options.
