Most auto rental companies offer a “collision damage waiver” that covers some loss of, or damage to, the rental vehicle. It is also called a “loss damage waiver.”
The collision damage waiver protects you if you damage a vehicle that you have rented. It protects you by transferring the responsibility for the cost of the damage from you to the auto rental company.
However, it often comes with exclusions as well. For example, it may not protect while you drive on unpaved roads. Also, the protection you get varies from company to company. You should check the fine print before you decide whether or not to buy it.
Auto rental companies charge a daily rate on top of the rental charge for the collision damage waiver.
You can buy the collision damage waiver from the auto rental company. Still, you should be aware of alternatives.
Your credit card may already provide collision damage coverage on vehicles that you rent. To be eligible for the coverage, you will likely need to charge the full amount of the rental to your credit card and decline the collision damage waiver offered by the auto rental company.
Your credit card coverage will be subject to certain conditions. For example, the collision damage coverage may only apply when renting vehicles from auto rental companies approved by your credit card company.
You should check with your credit card company to learn more about the limitations of its coverage.
Most Ontario auto insurance companies offer the option of additional coverage for liability for damage to automobiles that you do not own. The coverage comes in the form of an endorsement known as “Legal Liability for Damage to Non-Owned Automobiles.” It is also called the “Rental Vehicle Insurance Endorsement” or “OPCF 27.”
If your auto insurance policy includes the OPCF 27, you already have coverage for damage to a vehicle you do not own, such as a rental vehicle.
A note of caution: the OPCF 27 is only valid for driving non-owned vehicles in Canada and the United States. If you are driving outside of Canada or the United States, you will have to purchase coverage elsewhere. Check with your insurance broker, agent or insurance company for more details.
If your auto insurance policy does not include the OPCF 27, you may want to consider adding it. The yearly cost of adding it to your policy is usually quite reasonable, making it an economical alternative to purchasing a collision damage waiver offered by an auto rental company.
If you have an at-fault accident with the rented automobile, and you are 50 percent or more at fault, the accident will still count against your driving record, regardless of who pays the damage claim. Check with your insurance representative for more details.
If you are not already covered under your Ontario auto insurance policy, through your credit card, or otherwise, and you choose not to purchase the collision damage waiver from the auto rental company, you will be responsible for the costs resulting from any at-fault damage to the automobile while it is in your care.