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How Does Car Rental Insurance Work in Canada?

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When you arrive at the car rental depot in Canada to pick up your rental car, you will have a few options of protection products to purchase in order to reduce your financial liability. For those who have not rented a car in the country before, this can be a confusing process. Here is a guide to assist you:

Which car rental insurance or protection products will I be offered at the counter?

There are four optional types of car rental protection products sold in Canada. Please note, however, that all the prices stated below are average indications only, and the prices can vary.

  1. Collision Damage Waiver (CDW) and Loss Damage Waiver (LDW): These policies reduce your financial responsibility for any damage charges relating to accidents or theft. Usually, it costs up to $30 per day.
  2. Liability Protection: This insurance covers you for damage you may inflict on other people, including their property while driving a rental car. It costs up to $10 per day.
  3. Personal Accident Insurance (PAI): This waiver covers you and passengers of your rental car for any medical expenses, such as injuries. For most renters who are already covered by personal health policies or travel policies, this policy may not be required. This insurance generally costs up to $10 per day.
  4. Personal Effects Coverage (PEC): This insurance offers you coverage for theft of or damage for your personal property while you are traveling with your rental car. Normally, it costs between $2 and $5 per day. Usually, this coverage is bundled with PAI.

Is it necessary to buy car rental insurance?

Usually, rental companies in Canada will require some foreign customers to have CDW and LDW insurance in order to be able to take the car. Note also that depending on the country and the state in which you are traveling, you may also be offered a Supplemental Liability Insurance (SLI) product by the rental company.

  1. Decide and ask yourself if you do not need additional coverage.
  2. Read and double-check your insurance policy documents.
  3. Make a call to confirm the details whether you are (or not )already covered by your credit card, personal travel insurance or car insurance.
  4. Note also that in some travel hot-spots, the cost of taxes, fees, surcharges and optional insurance can easily exceed the daily base rate of the rented vehicle.
Find out more information about how insurance works in Canada. 

Read about more important things to know when you pick up a rental car in Canada.

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