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When you rent a vehicle in Canada, whether to run some local errands or when you’re travelling, you’ll find yourself faced with a decision whether or not to purchase rental car insurance.

If you’re not prepared for this question, you may end up spending a lot more to rent a car than you have to, just to be sure you’re covered.

Rental car insurance basics

The surprising truth is that in many, if not most, cases you likely already have rental car insurance through:

With a little preparation and research, however, you can save yourself a bundle by being able to safely decline insurance you don’t need.

Let’s start with the basics on rental car insurance

Is rental car insurance mandatory in Canada?

This is actually a trickier question than you may expect, because the answer boils down to: “no, but yes.”

While Canadian citizens are not required to purchase additional insurance from the rental car company when renting a car, you do need to have some insurance that will cover you in case of an accident.

In all parts of Canada, third party liability coverage is required to operate a vehicle. Because of this, the legal minimum is often included with your rental car.

You may already be insured

Also, many of us already have some form of rental car insurance through our existing personal car insurance, credit card insurance, or travel insurance policies.

Be sure to call your auto insurance company or credit card provider if you’re not sure whether you’re covered or not. If you’re not adequately covered, you should consider buying additional insurance from the rental company.

Different types of rental car insurance

There are 4 different types of car insurance that will cost extra if you choose to buy them when renting a car.

Type of insurance Additional cost Best alternative
Third party liability coverage Minimum coverage is included (by law), additional coverage can sometimes be purchased for up to $10 a
day
Personal auto insurance
Collision and loss damage waiver (CDW, LDW) Up to $40 a day Credit card insurance
Personal accident insurance (PAI) Up to $9 a day Credit card insurance
Personal effects coverage (PEC) Often bundled with PAI, but can be up to $7 – $8 a day Credit card insurance

Curious what rental car companies generally charge for insurance? We did some research and you can see the big list here.

Third party liability coverage

Third party liability insurance covers you if you cause damage or injury to other people or their property while driving a car.

In Canada, third party liability coverage is required in order to operate a vehicle, and there are minimum requirements in each province and territory.

Generally, if a liability claim exceeds the minimum amount, excess payment for property damage is capped.

Province/Territory Minimum Liability Insurance Property Damage Payment Cap
Alberta $200,000 $10,000
British Columbia $200,000 $20,000
Manitoba $200,000 $20,000
New Brunswick $200,000 $20,000
Newfoundland & Labrador $200,000 $20,000
Nova Scotia $500,000
Northwest Territories $200,000 $10,000
Nunavut $200,000 $10,000
Ontario $200,000 $10,000
Prince Edward Island $200,000 $10,000
Quebec $50,000
Saskatchewan $200,000 $10,000
Yukon $200,000 $10,000

It is generally recommended that you increase your coverage to $1,000,000 or $2,000,000, because if you get in an accident and cause serious harm or death, the minimum coverage will likely be inadequate.

Some rental car companies also offer supplemental liability insurance for a reasonable fee, if you are unsure whether you have adequate coverage.

Collision and loss damage waiver (CDW & LDW)

This type of car insurance covers the costs if anything happens to the car itself, but nothing else. For example, this would cover damage or loss due to fire, theft, or accidents.

If you purchase this sort of insurance from a car rental company, it will likely be fairly expensive because they often include extra coverage for things like lost revenue while the car is being repaired, administrative fees, and the like (it can easily be $30 or more per day).

While you may already have insurance that would cover the damage to the car, it may not include this additional coverage. Be sure to double check before declining this when renting a car.

Personal accident insurance (PAI)

This covers the medical costs for you or your passengers if you get in an accident, and will sometimes include accidental death and dismemberment coverage.

Related: How To Maximize Your Tims Rewards

Personal effects coverage (PEC)

PEC insurance pays for your personal property if it’s lost, damaged, or stolen while in your rental vehicle. This is usually bundled together with PAI coverage when renting a car, but is usually a separate coverage if it’s included with your credit card.

Are you covered by your personal car insurance?

Your personal auto insurance will often include coverage for rental cars. If it does, it will usually include third party liability coverage and accident benefits with limits the same as for your own vehicle.

To be certain, however, you should read your insurance policy in detail, or call your insurance company and ask. They’ll be happy to help you figure out what you are and aren’t covered for when renting vehicles.

Are you covered by your travel insurance?

If you purchase a travel insurance package to cover you while you’re travelling, you may have the option to have it include rental car insurance.

This is often available as an add-on, rather than as a default part of an insurance bundle, and will usually cover your rental vehicle against damage or loss. Sometimes it will also cover costs such as towing, salvage, fire department charges, and reasonable loss of use.

Of course, to be absolutely certain of what is or isn’t covered, you should read your travel insurance package thoroughly, or call your insurance provider to get all the details.

Are you covered by your credit card insurance?

Many premium credit cards (particularly those focused on travel) include various insurance coverages that apply to rental cars.

For example, the includes 14 types of insurance, including 3 specifically for rental cars:

  • rental car theft and damage,
  • rental car accident, and
  • rental car personal effects.

These effectively cover collision and loss damage waiver (CDW & LDW), personal accident insurance (PAI), and personal effects coverage (PEC).

What isn’t included is liability insurance. In fact no credit card offers liability insurance for rental cars, so you’ll have to make sure you have liability coverage from another source.

Also realize that any insurance you get through a credit card is going to have an upper limit, so be sure to check what those limits are and decide whether you’re comfortable with them.

Insurance is one of those things that can seem expensive until you need it. It is wisest to err heavily on the side of caution.

Best credit cards for rental car insurance

Here’s a list of our favourite credit cards for rental car insurance.

Credit Card Collision Damage Waiver (maximum) Personal Accident Insurance Personal Effects Insurance Learn More
$85,000 Up to $300,000 $2,000 per occurrence Learn more
$65,000 Up to $200,000 $1,000 per occurrence Learn more
$65,000 N/A N/A Learn more
$65,000 N/A $2,000 per occurrence Learn more
$65,000 Up to $200,000 $1,000 per occurrence Learn more

If you’re not sure, you can search for it in our database. You can just start typing the name of your credit card in the search box, and it should pop up in the selection list.

Credit card search dropdown

Click on your card’s name and you will be redirected to a standalone page that covers all the details of your credit card.

Near the top of that page, you’ll see some tabs. Click on the “Insurance Coverage” tab to view the insurance coverages offered by your credit card.

Insurance tab

If your card includes any rental car insurance, it will be displayed towards the end of the list, like so:

Credit card search coverages

“Rental Car Theft & Damage” is essentially “Collision and Loss Damage Waiver.” We don’t display the coverage details for it, just whether or not it is offered. You will have to read your credit card’s insurance policy for those details.

Bonus read: Find out our top 5 credit cards with complimentary car rental insurance.

Credit Card Rental Insurance 101

What do rental car companies typically charge for insurance?

As you may expect, what you’re charged for insurance depends on where you are, who you are, and what kind of vehicle you’re renting.

To come up with some examples, we looked at prices at the Toronto, Halifax, and Calgary airports, and compared Compact vs Intermediate SUV in Toronto.

These prices are all per day, in addition to the base rental cost, and are for a driver who is 25+ years of age.

Here’s what we discovered.

Rental company CDW – Toronto (Compact) CDW – Toronto (SUV) CDW – Halifax (SUV) CDW – Calgary (SUV) PAI PEC
Advantage $19.99 n/a n/a n/a n/a n/a
Alamo $29.99 $31.99 $31.88 $32.99 $6.99* n/a
Avis $30.00 $33.00 $20.00 $32.00 $6.00 $3.00 – $3.50
Budget $30.00 $33.00 $20.00 $31.95 $8.00 – $9.00** bundled
Discount $23.99 $27.99 $28.99 $28.99 n/a n/a
Dollar Price n/a Price n/a Price n/a Price n/a $8.98 bundled
Enterprise $27.99 – $31.99 $27.99 – $31.99 $22.99 – $39.99 $29.99 – $32.99 $6.99* bundled
Hertz $31.99 $36.99 $36.99 $36.99 $8.98*** bundled
Iversta $14.77 $23.99 n/a n/a $9.00 $7.00
National $29.99 $31.99 $31.99 $32.99 $6.99* bundled
Payless $29.00 $32.00 n/a $32.99**** $9.00 n/a
Routes $15.99 $15.99 n/a $15.99 n/a n/a
Thrifty Price n/a Price n/a Price n/a Price n/a $8.98 bundled
Zoom $21.99 CDW
$12.99 LDW
$21.99 CDW
$12.99 LDW
n/a $21.99 CDW
$12.99 LDW
n/a n/a

* PAI/PEC is not offered by this company in Calgary
** Budget offers PAI/PEC separately in Calgary at $4.00 each
*** PAI/PEC are not offered by this company in Calgary or Halifax
**** Winnipeg branch, no branch in Calgary

Advantage car rentals

Advantage has over 10 car rental locations in the Greater Toronto Area, including:

  • 2 Downtown Toronto
  • 2 Scarborough
  • Woodbridge
  • North York
  • Toronto East
  • East York
  • Mississauga
  • Vaughan
  • Toronto Billy Bishop Airport
  • Toronto Pearson International Airport

Learn more here.

Alamo car rentals

Alamo has locations around the world, including multiple branches in each of these Canadian cities:

  • Vancouver
  • Calgary
  • Edmonton
  • Winnipeg
  • Ottawa
  • Toronto
  • Montreal
  • Halifax

Learn more here.

Avis car rentals

Similarly, Avis is a global company with locations all over North America and around the world. Locations in Canada include multiple branches in the following provinces:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

Learn more here.

Budget car rentals

Budget is in over 130 countries with hundreds of locations in Canada, where they have branches in all provinces and territories, except Nunavut.

Learn more here.

Discount car rentals

Discount has over 130 locations across Canada, including in most major cities in:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

Learn more here.

Enterprise car rentals

Enterprise has over 7,600 locations around the world, including Canadian branches in:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland and Labrador
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

Learn more here.

Hertz, Dollar, and Thrifty car rentals

Hertz has over 30,000 corporate and franchise locations between Hertz, Dollar, and Thrifty. Hertz branded locations in Canada can be found in:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland
  • Northwest Territories
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

Learn more here: Hertz, Dollar, Thrifty

Iversta car rentals

Iversta is a tiny rental company located in Toronto, with 4 locations:

  • Toronto Pearson International Airport
  • Markham
  • Mississauga
  • Richmond

Learn more here.

National car rentals

National Car Rental has over 1,500 locations in 78 countries. There are 134 branches in Canada, including all provinces and territories except Yukon and Nunavut.

Learn more here.

Payless car rentals

Payless has locations in over 30 countries worldwide, but only 4 locations in Canada:

  • Kanata, Ontario
  • Montreal Trudeau International Airport
  • Toronto Pearson International Airport
  • Winnipeg Airport

Learn more here.

Routes car rentals

Routes has 21 locations worldwide, including 5 in the United States. Canadian locations include:

  • Surrey, BC
  • Ottawa, ON
  • Calgary, AB
  • Edmonton, AB
  • Vancouver, BC
  • Scarborough, ON
  • Alliston, ON
  • Toronto, ON (Danforth)
  • Toronto International Airport

Learn more here.

Zoom car rentals

Zoom is relatively small with only 8 locations. Canadian branches can be found in:

  • Toronto International Airport
  • Billy Bishop Airport
  • Toronto
  • Mississauga
  • Calgary
  • Calgary Airport

Learn more here.

Bottom line

While it can take a bit of time to research whether your existing insurance coverage includes rental car insurance, it is usually worth the effort because you can save hundreds of dollars if you’re renting a vehicle for any extended period of time.

Want to know more about credit card insurance? See our list of 17 here.

credit card insurance

FAQ

How do I get rental car insurance?

There are a few ways you can get rental car insurance. It is often included as part of personal auto insurance policies, but you’ll have to check with your insurance company to be sure. Many premium credit cards also include some form of rental car insurance, although limits are generally fairly low. You may also have rental car insurance as part of your travel insurance package, if you have one. Finally, you’ll always have the option of purchasing insurance when renting a car from an agency.

Does my credit card include rental car insurance?

Some do, but most don’t. If you want to find out you can search for your credit card in our database, but to be certain (and for coverage details), you should read through your credit card agreement and insurance certificate.

Does my regular car insurance include car rentals?

Personal auto insurance policies often include some coverage for rental cars. You should read through your policy to be sure, or call your insurance provider and ask.