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Mythbuster: Wavering on that extra waiver offered by the rental car company?

Myth: When renting a vehicle, you must purchase the daily insurance provided by the rental company.

Fact: Through your own personal auto insurance policy you may have sufficient coverage. However, there are some limitations and you may need to purchase additional insurance.

Are you renting a vehicle as a replacement while yours is being repaired or planning a trip and need a rental at your destination? In any case, understanding your auto policy is critical when deciding whether or not to purchase coverage from the rental company.

Most auto policies in Alberta have coverage that protects you if you damage a vehicle that you have rented, eliminating the need to purchase additional coverage from the rental company. This coverage is called Legal Liability for non-owned automobiles (SEF 27).

Even if your auto policy includes the SEF 27 coverage there are three considerations:

  1. Limits based on the value of the vehicle. Standard coverage is $50,000 CAD. This can be adjusted to suit your needs. For example, if you are renting a high-end Mercedes for a drive up the California coast, and the vehicle is valued over $50,000 CAD, you must ensure you’ve increased your policy limits to provide enough coverage should you be responsible for replacing the rental.
  2. There is a time limit of 30 days. If you are planning on renting a vehicle for a longer than 30 days you may need to purchase additional coverage.
  3. Coverage only applies while renting in Canada and the United States. If you are driving internationally you will need to purchase additional coverage.
  4.  If your current policy does not have sufficient coverage for rentals, you may want to consider bumping up the current limits. The annual cost is usually quite reasonable, and if you are renting frequently the cost of adding the coverage to your own policy will generally be less then purchasing from the rental company.
When you require additional coverage not offered through the SEF 27, you have the option to purchase coverage from the rental car company, in the form of a collision damage waiver. This protection will transfer the responsibility for the cost of damage from you to the rental company.

It’s important to know your policy; if you are unsure if you need additional coverage or have any questions contact your TW Insurance broker at 1-888-338-2685