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Car Rental Insurance Guide

car rental insurance button on the computer keyboard

VroomVroomVroom compiled this guide for renters who are traveling to Canada to help them fully understand if they are covered and whether they need to buy additional insurance for their rental cars. Traveling to other countries? Click on the following links: AustraliaNew ZealandUnited Kingdom and United States for more information about rental insurance.

Rental Car Insurance Explained

Generally, no additional car insurance coverage is required because renters may already be covered by personal car insurance, a credit card, or travel insurance.

3 tips before you step up to a rental car counter

 It is important to know if you are already covered so you don't need to purchase insurance at the rental counter.

  1. Call your car rental insurance company and ask what is covered. Always carry your car insurance declaration page.
  2. Contact your credit card company to determine what coverage it provides.
  3. If Tip 1 & Tip 2 don't provide you necessary coverage, then that's when you should start thinking of purchasing the offered car rental insurance. Don't forget to read, clarify and ask if confused before signing anything.

What coverage options are offered by rental car companies?

Here's a quick explanation of the four types of cover every rental car needs. Note that  these may differ from supplier to supplier. For more detailed  information, see How Does Car Rental Insurance Work in Canada.

1. Collision Damage Waiver (CDW)

Buying the CDW protects the renter from paying for a damaged or stolen car. This costs up to $30 per day. 

2. Supplemental Liability Insurance (SLI)

The SLI coverage which costs up to  $10 per day insures the renter for bodily injury, or death and property damage. 

3. Personal Accident Insurance (PAI)

Purchasing the PAI covers the renter and all passengers inside the vehicle for any medical expenses. It usually costs up to $10 per day. Take note that this insurance is not required for most renters already covered by personal health policies or travel policies. 

4. Personal Effects Coverage (PEC)

If PEC is purchased and paid for, this insures the renter against risks of loss, theft or dame to personal items. The insurance  costs between $2 and $5 per day. Take note that buying the PAI-PEC is optional and not required.