What is Rental Car Insurance?

If you've ever rented a car, you'll probably recall being asked if you wanted to purchase rental car insurance. But considering it isn't mandatory coverage, do you really need to buy it? Well, rental car insurance is protection you'll want to have to cover your rental car if anything happens to it while you're travelling from point A to point B. And it may be coverage you already have. To avoid purchasing additional coverage you may not need, you'll want to check if you're covered for a rental car prior to picking it up, or even better, prior to booking the car. But how do you know if you're covered? And should you consider purchasing insurance via the rental agency? We'll cover some questions you may have so you can drive out of the lot with confidence.

Does my existing insurance cover a rental car?

When renting a car for leisure or pleasure, it's important to know what coverage (if any) from your existing policies can extend to and protect a rental vehicle. Especially if you're choosing to opt out of the coverage offered by a rental agency, you'll want to ensure you have some level of coverage. Of course, it'll depend on your specific policy details, so here are some policy examples to consider:

A. Policy with mandatory coverage (required by your province): If you have a car insurance policy with only mandatory coverage, it'll be your responsibility to pay for repair/replacement costs out of pocket, should you experience any loss or damage to your rental car.

B. Policy with enhanced coverage add-ons such as Comprehensive or Collision: If you have a car insurance policy with these add-ons, any covered losses may also extend to your rental car (subject to your deductible, of course).

C. Policy with Grand Touring Solution®: If you have a car insurance policy with TD Insurance, and if eligible, you can purchase the Grand Touring Solution® add-on which offers the greatest level of coverage. Your rental car will be covered for third-party liability, damages when driving within Canada or the U.S., and even temporary replacement of your rental car due to a covered loss.

D. Policy with Umbrella coverage: If you have an existing TD Insurance home insurance policy with Personal Umbrella coverage as an add-on, it'll offer extended coverage when driving outside of Canada and the U.S.

Check your car insurance policy (or home, depending on where you'll be renting a vehicle) ahead of time so you can rest-assured that you're covered should anything happen on your trip. If you're a TD Insurance customer, you can review your policy details through MyInsurance or the TD Insurance app at any time. Should you want to add coverage to your policy that will extend to a rental car, you can manage your policy online, or you can contact us to help adjust your coverage. And remember, you may be required to show proof of insurance when declining coverage at the rental agency. Have your pink card, policy details or policy number handy, just in case.

Will my credit card cover me?

There are tons of credit cards on the market that offer benefits which may include some level of protection for a rental car. Because each card (and card company) offers different coverages, it's important to first review your cardholder agreement or reach out to your credit card company to ensure you have enough coverage.

Keep in mind that with most credit card companies, there are certain conditions that must be met for coverage to be active. For example, in order for coverage to apply, some credit card companies may require you to charge the cost of the rental vehicle to your credit card. And, with your credit card's coverage, although most vehicles are covered, there are some exceptions. Make sure you check your credit card policy for further details or reach out to your credit card company for further information.

When should I consider the rental insurance option made at a car rental agency?

Car rental agencies typically offer a Damage Waiver which like the name suggests, will waive the responsibility of the renter if the rental car experiences loss or damage. They can also offer Personal Accident Insurance which will provide the renter and their passengers with some level of accident benefits.

With that being said, you may want to consider purchasing coverage via the car rental agency if you:

  • don't have a car insurance policy or Umbrella coverage (if required) that can extend to a rental car, or
  • you don't have coverage through your credit card.

Although not mandatory, having some degree of coverage will help prevent you from paying out of pocket should anything happen to you or your rental.

If I get into an accident and my car needs to be repaired/replaced, does my car insurance policy include a rental car?

You may be covered to get a rental car until your own car is fixed and ready to go depending on whether your car insurance policy has Loss of Use coverage*. This coverage will allow you to have a rental car for the time period that your car is being repaired or replaced, subject to your policy limits.

*included with Grand Touring Solution®

Protecting your rental car can protect you from unexpected costs. Review your existing coverage and get the right car rental insurance for you so you can travel with confidence.