Does personal car insurance cover rental?

Family loading luggage into a rental vehicle

While public transit within city limits is usually fairly decent, in certain situation or locales, you can sometimes get to your final destination quicker by car. For this reason, many people choose to rent a car while on vacation.

The convenience of having your own vehicle can be a huge benefit when you’re on vacation, but if your rental car is involved in an accident, are you covered? Keep reading to learn more about personal auto insurance as it relates to rental cars. In addition, learn why you should have a conversation with your insurance representative before you attempt to rent your car to others.  

Does my personal policy cover my rental car?

Any time you rent a car, you are taking responsibility for the vehicle and anything that happens to it. Things like a broken window or stolen tires can cost thousands of dollars. Without adequate car insurance coverage, you may also be on the hook for damage to other people's property if you are involved in an at-fault accident. Furthermore, car rental companies may charge you for lost time because they were unable to rent the vehicle to others due to repairs.

Knowing this, it's safe to say that making sure you have insurance before you rent a car is important. Be sure to ask both your insurance company and your rental company about their coverage and ensure you have sufficient coverage, keeping in mind you may need extra coverage traveling outside of Canada. Most personal car insurance policies have an optional coverage for you to purchase to cover rentals in case of an accident, so it’s a good idea to reach out to your insurance representative before you travel as this coverage is only available in certain countries. It’s also a good idea to find out whether your personal property is covered under your car insurance.

Outside of your personal policy, you can buy insurance from the car rental company itself. This usually incurs daily fees that may cause you to think twice before signing on the dotted line, but the in-house policies offered are usually hassle-free in the event of an accident.

Why borders are important to consider

Traveling between countries adds an additional level of complication when it comes to rental car coverage. Thanks to ease of access laws, most insurance companies offer coverage in both the United States and Canada, but anytime you cross a border, you should reach out to your insurance representative and ask what's covered and what's not. In the United States and Canada, each state or province has its own laws regarding insurance liability limits and important traffic laws, so it helps to do some research about your destination.

Some major credit cards also offer free rental car insurance provided you pay for the rental car using that credit card. This is a fantastic benefit that many people do not know exists - check with your credit card company to see what limitations may exist on travel to certain states or countries, as well as any restrictions on drivers.

Leasing or renting your vehicle to others

This is separate from loaning your car to your licensed friend for the day. In this case, we are dealing with actually receiving money and renting out your car either personally or via a car-sharing app. Many insurance policies specifically exclude this sort of coverage, but some may cover it. Some insurers may offer vehicle sharing system coverage for those who are using the TURO, Outdoorsy, and Shiftride apps as an additional package.

Additionally, depending on the arrangement, the rental may fall under business insurance services. Before you attempt to rent your car to others, you should have a conversation with your insurance representative.

The content on this page is for information purposes only. The insurance products described herein are subject to terms, conditions, restrictions and exclusions, which are outlined in our final policy wording. Please speak with your Aviva insurance broker if you would like to learn more including whether these insurance products are available in your province or territory. Insurance products are underwritten by insurers in the Aviva Canada group of insurance companies, which are subsidiaries of Aviva Canada Inc. Aviva and the Aviva logo are trademarks used under license from the licensor.