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Sammy Welch stands next to the Toyota RAV4 in Toronto on Sept. 1. Welch has been renting the RAV4 for the past six months while his car is in the shop awaiting repairs.Duane Cole/The Globe and Mail

Sammy Welch has spent more than $4,500 in rental car costs this summer – and not because of revenge travel. Rather, the expense is for using a loaner vehicle while his own Ford Flex awaits a new headlight in a Mississauga repair shop.

Mr. Welch’s SUV has been in the shop since March 9, after a collision with a streetcar in Toronto warped the hood and broke both front lights. The holdup: The body shop hasn’t been able to get its hands on a second of the two new headlights the car requires.

Meanwhile, Mr. Welch’s $3,000 insurance coverage for the cost of the replacement rental ran out in May, leaving his one-car family to pay out of pocket for the rest of the summer.

In yet another quirk of the COVID-19 economic recovery, vehicle repair times are often stretching from weeks into months as auto mechanics and body shops struggle to source everything from engine sensors to catalytic converters, experts say.

And as service times extend well past the standard insurance coverage for alternative transportation costs, consumers such as Mr. Welch are finding themselves paying rental charges with no reimbursement.

“No one takes any responsibility for it and no one wants to cut you a deal,” he said, adding that he still doesn’t know when the crucial headlight will arrive. “It’s just ridiculously expensive.”

“I’ve seen drivers wait three or four months for a vehicle repair, while their insurance policies only cover a fraction of what they need to cover,” said Kelsey Hawke, an insurance expert at financial products comparisons site RATESDOTCA.

It doesn’t help that persistent auto supply chain snags and booming demand for travel have pushed rental fees skyward. The average price for loaning a vehicle in Canada is currently hovering around $140 a day, up 33 per cent from last summer’s already steep rates and roughly double what consumers were paying during the same period in 2019, according to data from KAYAK, a travel search site.

While loaner vehicle rates that rental operators negotiate with auto dealers, body shops or insurers are lower than the retail rates available to the public, they, too, have been climbing amid a nationwide rental shortage, said Craig Hirota of the Associated Canadian Car Rental Operators (ACCRO).

Rental vehicle companies are still in the process of rebuilding their fleets after selling off between 30 per cent and 40 per cent of their vehicles when demand for rentals collapsed amid the lockdowns of 2020, Mr. Hirota said.

But slower-than-usual auto production amid stubborn supply chain snarls has weighed down those rebuilding efforts, he said. And lengthy repair times mean some rental vehicles themselves are languishing in auto body and mechanic shops, further adding to the shortage, he added.

“It all feeds into itself,” he said.

While the world waits for the supply chain kinks to work themselves out, consumers may want to take a second look at their auto insurance policies, said Ms. Hawke.

Under Ontario’s direct compensation property damage (DCPD) insurance system, drivers usually have coverage for the cost of alternative transportation – such as a rental vehicle, taxi charges and public transport tickets – when they are not at fault in a collision, Ms. Hawke noted.

But your insurance likely won’t pony up any cash if you’re deemed responsible for the damage, unless you had purchased an optional so-called loss-of-use endorsement, she added. (In cases where you’re found to be partially at fault, the insurer will cover a percentage of the cost.)

For stolen vehicles, the standard is approximately $900 worth of transport costs, a sum that may also fall far short of what you might need these days as you wait for a new car, Ms. Hawke said. Beefing up that coverage also requires an optional rider.

Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island and, recently, Alberta have also adopted the DCPD approach. And British Columbia’s Basic Vehicle Damage coverage works in a similar way.

Manitoba’s basic public insurance plan will pay up to $1,411.20 after tax for transportation costs if your vehicle is stolen, but loss-of-use coverage is otherwise extra. In Saskatchewan coverage for temporary transportation expenses is also optional.

Speaking about Ontario, Ms. Hawke said insurers in the province typically provide loss-of-use coverage endorsements based on duration – often with terms of between 30 and 90 days – or capped at a certain dollar amount. Annual fees vary, though you can expect to pay around $40 or $50 for an additional 30 days or $1,500 of coverage, according to RATESDOTCA.

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