Are you planning to rent a car on your next holiday trip? When it comes to insurance, different rules apply in Canada, in the U.S. and overseas. Here’s what you need to know, to be sure you take to the road with peace of mind.

Damage to the rented vehicle

If you’ve ever rented a car, you know how much collision insurance drives up the price—it can sometimes cost as much as the rental itself. It’s essential, however, that you purchase insurance against this type of damage, with or without a deductible.

The coverage included with your own automobile insurance (Endorsement Q.E.F. 27) or available from your credit card provider may be enough. You should check the scope and conditions of that insurance, however. Is it valid for a limited time? Does it cover vandalism? For the insurance to be valid, do you need an International Driving Permit (you should have one regardless)?

If your auto insurance policy or credit-card insurance don’t provide this coverage, it’s often more economical to opt for prepaid insurance, which, as its name indicates, you’ll purchase before you leave on your trip.

Otherwise, rely on your own insurance, and decline the expensive policy that the rental agency will offer you. And remember to carefully read the rental contract before signing it. If you have any doubts, ask for a detailed explanation. It’s difficult to amend or terminate a contract once you’ve signed it. Be careful: in many European countries, collision insurance is automatically included in the base price. If you don’t want to pay double, make sure the agency removes the insurance from the service provision.

Various options depending on the destination

If you’ll be renting in Canada or the U.S., you have three options:

  1. Check whether your insurance policy includes Endorsement Q.E.F. 27, “Civil Liability For Damage to Non-Owned Automobiles.” If it is, you’ll be covered exactly as if you were driving your own vehicle, with the same options and deductible amount, and up to a specific amount. The No-Stress Policy, available exclusively to CAA-Quebec members, includes this endorsement.
  2. If you are charging the rental to your credit-card account, check whether insurance is provided by the card issuer.
  3. If neither of the above options is available to you, choose the insurance that the rental agency offers you.

For more information about the coverage options available when driving in the U.S., see our Tips & Tricks instalment entitled Heading for the United States by road? Travel with peace of mind!

If you’re renting a vehicle overseas, you have two options:

  1. If charging the rental to your credit-card account, check whether insurance is provided by the card issuer (if it is, you must refuse the insurance offered by the rental agency).
  2. If not, accept the insurance offered by the rental agency, because Endorsement Q.E.F. 27 does not cover you outside Canada and the U.S.

Injury and property damage to others

The other must-have coverage is civil liability. This is the portion of your insurance policy that will cover compensation for the other party in the event of an accident. This coverage is compulsory in many countries and states. In Europe, it’s usually included in the vehicle rental base price. If it isn’t, make sure to purchase it.

If you have your own auto insurance, you should already be covered for civil liability in Canada and the U.S. The minimum coverage amount probably won’t be enough, however. You should have it increased to at least $2 million for the duration of your trip. That way, you’ll be better protected in the event of a claim, especially in the U.S., where lawsuits are definitely not to be taken lightly.

Injury to yourself

For injuries sustained in a car accident anywhere in the world, you would be compensated by the Société de l’assurance automobile du Québec (SAAQ), regardless of whether you were at fault. The SAAQ would cover the extra expense related to your hospital stay in case of an accident (the portion not covered by the Régie de l’assurance-maladie du Québec, or RAMQ).

You would be able to claim all the compensation to which you are entitled upon your return to Quebec. Your stay abroad must not exceed 6 months (it must be less than 183 days, to be precise).

In all cases, you are strongly advised to purchase travel insurance that includes medical and hospitalization coverage before you leave. This insurance could save you plenty of administrative headaches if you are hospitalized while in another country. As a bonus, you’ll also be covered for medical costs other than those stemming from an automobile accident, which often exceed the amounts reimbursed by the RAMQ.

Important: remember to take along all documents

Whichever insurance option you choose, print out the rental contract, carefully read the conditions regarding the time and place you’ll be picking up and returning the vehicle, as well as fees that could be requested at the agency (e.g., eco-tax, extra amount for a second driver, or for a driver aged under 25). Be sure to put all the documents relating to the details of the transaction with your other travel documents: they constitute proof of what you’ve agreed to and booked.

If you’ll be relying on the coverage included with your auto insurance or your credit card, ask the issuer of the insurance to send you the necessary proof in writing. (You’ll find the Q.E.F. 27 endorsement after the main section of your insurance contract; also, the reverse side of your proof of insurance document—the one you carry in your wallet—includes a summary of your coverage.) A printout of the conditions downloaded from the Web isn’t enough. If your policy is in French, ask for an English version as well, to show if needed.

On that note, happy motoring!