Skip to main content

I rent a fair number of cars every year. I never use the car rental insurance as I am covered by my policy to drive cars other than my own. Rental contracts often only allow secondary drivers if they are declared ahead of time and if they are older than 25. If I use my own insurance to protect the car and its drivers/passengers, am I obliged to follow those restrictions? Worded another way, what would happen if I allowed an under-25 undeclared to drive the rental vehicle and we had an at-fault accident? – Paul

Declining the rental company's insurance doesn't mean that you're absolved of the conditions of the contract you've entered with it. On a standard rental agreement, this typically includes declaring all drivers. As you mentioned, some agencies do not permit drivers under the age of 25 to operate their vehicles.

What are the potential consequences of not declaring a driver? "Every situation is different," says Bill McNeice, President of the Associated Canadian Car Rental Operators.

Story continues below advertisement

He says that in the event of loss or damage to its vehicle, the rental company will turn to you – or your insurance provider – to recoup the loss. If you decline the insurance offered by the rental company and accept responsibility for any damages to the vehicle, you'll want to make sure you have adequate coverage.

"If (the customer has) waived that, so they're responsible for all physical damage, and they write off a $30,000 car and tomorrow we say, 'Mr. Smith can we have our $30,000 now?'" says McNeice. "If there was another driver that happened to be involved in it, as long as the coverage is there, that's all we're really looking for, for the damage recovery."

From an insurance perspective, and specifically when relying on coverage from your own policy, there are things to consider before allowing someone else to drive a car you've rented.

"There are two parts to any auto policy in Canada," says Natalie Dupuis, senior product manager, auto, at RBC Insurance. "First, the part that covers liability on the vehicle that you're renting.

"So this is: I'm driving that car and I have an accident and I'm at fault. The damage is to the party, and not the vehicle I'm driving itself. The damage is to another car. So that portion is included in your auto policy provided that vehicle I'm renting isn't owned by me and it's not something I use on a regular basis.

"So if I'm going on vacation and I'm renting a car from a rental agency, that portion of my policy is automatic and it covers myself and my spouse if we live in the same household," says Dupuis. "It doesn't cover any other drivers in my household, even if they're listed in my policy."

The minimum third-party liability required in most provinces is $200,000. However, you may want increased coverage, ideally more than a million dollars. In addition, you'll want coverage for damages to the rental car itself.

Story continues below advertisement

"Now you'll need to add a rider or an endorsement to your policy for car rentals. It's called the 27 endorsement and it's the same number in all provinces – they might have some letters at the end of it," says Dupuis.

"It extends your policy to cover the damages for the actual vehicle and usually the protection is the same as it would be for the car that you normally cover through your insurance policy. And it's a lot less than buying it through a rental agency."

If you have questions about driving or car maintenance, please contact our experts at globedrive@globeandmail.com.

Follow us on Twitter @Globe_Drive.

Add us to your circles.

Sign up for our weekly newsletter.

Story continues below advertisement

Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.