What insurance comes with rental cars in Canada?

JASON TCHIR | The Globe and Mail

My daughter is getting married in B.C. and many guests are coming from Europe. I’ve spent several days trying to determine what insurance is provided by the rental company. I did not expect it to be a nightmare . Having talked to Enterprise, Avis Canada and the Insurance Bureau of Canada (IBC), I’m totally confused as to what is included. The IBC says cars come with a minimum of $200,000 third party liability insurance and some companies have $1-million. The rental companies say absolutely no insurance is provided and renters need to buy their collision damage waiver (CDW), third party liability and personal accident insurance at the counter. — Mick, Vancouver

“The customer is usually responsible for the full value of the rented automobile regardless of fault,” says Craig Hirota, Member Services Manager with the Association of Canadian Car Rental Operators (ACCRO) in an email. “Plus additional costs such as loss of use, administrative fees, diminishment of value, tow and storage fees, etc.”

The only thing included with a car rental is the mimimum $200,000 third party liability required by law in B.C. for all vehicles. It covers you for up to the limit if you’re at fault in an accident that caused property damage, injury or death. But it doesn’t cover damages to the car.

For a daily charge — on Avis’s website, it starts at $29 — car companies offer damage waivers that cover all, or part, of the costs of damage to a rental vehicle.

But you might not need to buy that waiver if you have enough insurance coverage with your credit card to cover the cost of the rental car — as long as you used that card to pay for the rental. Not all credit cards automatically cover rental car damage.

You might also have coverage for Canada and U.S. rentals with your Canadian car insurance. For example, in B.C. some Insurance Corporation of British Columbia policies offer rental car insurance automatically — and you can also purchase it when you need it for $10. But only if you’re a resident.

You’ll notice we’re using the word might — you’ll have to check with the rental company, your credit card company and your insurance company to see exactly what you’re covered for.

“Typically, personal auto policies from Europe may not transfer to a rental vehicle — therefore, any damage or loss of the rental vehicle is the customer’s responsibility.” says Lisa A. Martini, spokesperson for Enterprise Holdings, which owns National, Enterprise and Alamo. “The European renter is protected for damages or injuries caused to someone else or someone else’s property at a minimum of $200,000 per occurrence.”

Damage to a rental vehicle might also be covered by travel insurance.

Renting and raving

Even if you buy the damage waiver, you could still be on the hook for repairs. In B.C., there were reports Budget charged renters for repairs even though they’d purchased loss damage waivers. In one case, the waiver was voided because the renter broke the law — he got a traffic ticket in a collision. It was all there in the fine print.

Enterprise’s Martini says the waiver is “subject to the terms and conditions of the rental agreement.”

“Read the fine print,” she says.

Rental companies also sell supplemental liability protection (SLP), personal accident insurance (PAI) and personal effects coverage (PEC).

SLP gives you extra liability coverage. For example, a Budget Avis Group spokesperson said their B.C. cars come with $1-million in third party liability but renters can purchase an extra $4-million in coverage.

PAI covers you if you’re injured or killed in accident. PEC covers some personal belongings.

Again, you might already have coverage for both of these in your existing travel or home insurance.

“It’s really important to do your research ahead of time — there’s not much time to decide when you’re there,” says John Karapita, director of public affairs for the Ontario Trial Lawyers Association. “That’s why its important to be armed with this information.”

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Ontario drivers won’t have to report minor collisions under $2,000 in damage

By Adam Miller, Global News

TORONTO — New Ontario road rules have come into effect this will double the threshold for reporting vehicle damage in collisions to $2,000.

Under the new rules, if a collision is estimated to cost a total of $2,000 or more in total damage, drivers must report it to police or a collision reporting centre. Anything less than $2,000 does not require police involvement.

The previous minimum for reporting damage was $1,000, which has been unchanged since 1998 when it was raised from $700.

If the collision injures someone or damages property other than the vehicles involved, it must be reported regardless of the cost of the damage.

The Ministry of Transportation said in a statement that the increase would enhance collision data integrity, align Ontario with other provinces that have made similar changes and address concerns that the former threshold posed an excessive burden on commercial vehicle drivers’ safety records — such as taxi or limousine drivers.

“It’s important for us to be actively reviewing, updating and modernizing our laws so that we are keeping pace with what’s in the marketplace,” Minister of Transportation Stephen del Duca said in a statement.

“These changes bring Ontario in line with other similar Canadian jurisdictions.”

The ministry said that while the change may result in a minor “burden reduction” for police by decreasing the number of crashes they investigate, it encourages all drivers to contact police in the event of a collision for advice on next steps and whether an investigation is needed.

But police said that as long as non-serious collisions are reported to insurance companies, drivers should be covered.

“We do have unfortunately a large insurance fraud issue in Ontario now, and in fact across Canada, which occurs quite regularly,” said Toronto Police Const. Clint Stibbe.

“These are checks in balances that are put in place in order to help keep the claims where they should be and that way there’s no frivolous claims being filed with police or insurance companies.”

Stibbe said that when the original damage threshold was set in 1998 it took a fairly substantial collision to add up to $1,000, but in recent years with changes in the way vehicles are designed even a small dent can add up quickly.

“By increasing the amount, it makes it less likely to have to report a collision unless there is substantial damage to a vehicle,” he said, adding that issues can arise when collisions aren’t reported to insurance companies.

“Reporting it keeps you as a consumer safe, because you don’t want to get into a situation where you try and make a deal on the side with somebody so it isn’t reported to insurance, but what ends up happening is that person isn’t as forthcoming or up front with you and in some cases maybe doesn’t reimburse you for the damage.”

Stibbe said it’s best for drivers to report all damage to their insurance company, in order to ensure the vehicle is repaired properly and to avoid any potential civil issues between two drivers.

The changes coincide with a number of new road rules coming into effect Sept. 1, including increased fines for distracted driving, a requirement to maintain a one-metre distance when passing cyclists and the inclusion of tow trucks in the Slow Down, Move Over law.

ICBC says soaring claim costs will mean higher insurance costs for B.C. drivers

VANCOUVER – It will be two months before the Insurance Corp. of B.C. applies for a specific change to basic insurance rates, but drivers across the province are being warned they will pay more.

ICBC has begun filing its basic insurance rate application with the BC Utilities Commission, but final parts of the application, including any request for a rate change, aren’t due until the end of October.

Despite that, the provincial auto insurer says a recent leap in injury claims means that if its request were filed today, it would have to ask for a 6.7 per cent rate hike, the highest possible under current legislation.

ICBC president Mark Blucher says the corporation will work with government over the next few weeks to identify ways to reduce the impending rate increase.

The insurance corporation says costs for bodily injury claims topped $2 billion for the first time last year.

They are expected to climb to $2.3 billion this year, an increase ICBC says amounts to 64 per cent, or almost $900 million, since just 2008.

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