Car Rental Insurance: Is It Worth It?

Woman getting into a rental car.
September 18, 2020

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A lot of drivers are on the fence about whether or not to add-on car rental insurance to the cost of their vehicle — but we’re not.

The way we see it: if you rent a car, you need rental car insurance. Why? Because without the right car rental insurance, you could be on the hook for claims totalling $10 million or more, and we want to protect you from that.

Keep reading to learn why car rental insurance is 100% necessary and 200% worth it!

Why You Should (Definitely) Get Rental Car Insurance

Driving an unfamiliar vehicle in a strange place makes a collision more likely. And, without the right insurance, you’re personally responsible for damage to the vehicle you rent– even if you’re not at fault!

Rental Car Insurance doesn’t just give you peace of mind, it can save you up to $10 million if a claim is filed against you.

Even a seemingly minor collision puts you at risk for having major claims filed against you from the rental company. Claims can also be filed against you for things like damage to others’ property, and damages for injuries. Most rental companies also charge “down-time” to compensate them for the time the vehicle is off the road being fixed or replaced. All of these costs add up fast!

How much coverage do I need?

When you start shopping for Rental Car Insurance, you’ll want to look for a policy that:

  • Covers rented or borrowed private passenger vehicles, light trucks, motorcycles
  • Extends to both Canada and the US
  • Includes both first- and third-party coverage
  • Offers $10 million of coverage in case others make claims against you
  • Includes $100,000 of coverage for damage to vehicles rented outside of Manitoba
  • Has daily allowances, payable to you, to rent a replacement vehicle
  • Covers “down-time” charges from the rental company


We recommend buying your car rental insurance through Manitoba Public Insurance (MPI). Their Rental Vehicle Insurance offers everything we’ve listed above giving you more extensive coverage than the other options out there. And, it comes in at a substantially lower cost, saving you up to $25 a day!

Wait, don’t I already have rental car insurance?

You might! But if you do, odds are it’s not enough.

As a Manitoba Citizen, if you’re hurt in a collision while driving a rental vehicle, you’re covered under MPI’s Personal Injury Protection Plan. This coverage can help a lot with your healing and recovery if you’re hurt, but it won’t help when it comes to third-party liability and claims from the rental company.

Credit Card Rental Insurance

Your standard credit card coverage only covers first-party liability unless you’ve specifically chosen a higher coverage option (think: $1, $2, $5, $7 or $10 million). It doesn’t protect you against claims from the rental company, and it won’t protect you fully from claims from other drivers if you travel in the United States.

Rental Car Company Insurance

Your car rental company might give you the option to add-on insurance, but it’s often sub-par.

Things To Consider When Purchasing Rental Car Insurance

  1. Drivers must be authorized. Rental Vehicle Insurance covers you (the policy holder) and any other driver IF the driver has your permission and is qualified/authorized by law to operate the vehicle. If they’re not a Manitoba resident, they must be qualified or authorized by law in their home jurisdiction. If they don’t have that authorization, coverage may not apply.
  2. You can extend your coverage later. If you end up needing Rental Vehicle Insurance for longer than expected, you can purchase a new Rental Vehicle Insurance policy for the extra days. Just know that a $15 policy fee applies to each policy you buy.
  3. You can cancel your policy later. If you don’t end up needing coverage for as long as you thought, or if your trip gets cancelled, you can cancel your policy. But, if you shorten or cancel after the policy has started, there could be fees.
  4. Some things won’t be covered. Your car rental insurance will not cover the following:
    • Tires
    • Vehicle contents 
    • Mechanical or other problems unrelated to an accident
    • Rented motorhomes, off-road vehicles and cargo vans, or trucks heavier than 4540 kg 
    • Your own vehicle or a vehicle owned by anyone else living in your household

How To Purchase Car Rental Insurance

1. Through the Rental Company

A lot of people decide at the last minute to add-on insurance through their rental company, without realizing that they’re paying a premium for the convenience! Rental company insurance usually costs a lot more than MPI’s insurance, and it’s rarely as comprehensive.

Pros:
● Convenience

Cons:
● Higher cost
● Lower coverage

2. Through Your Credit Card

Most credit cards automatically provide coverage, but it’s usually only first-party liability coverage. This makes it less comprehensive than the Rental Vehicle Insurance you can get through MPI.

If you choose to go with your credit card’s rental car insurance, you can expect:

  • A lower liability limit, which won’t give you adequate coverage
  • Restrictions and conditions to accessing your coverage
  • 30 days of coverage at most
  • No coverage for bigger vehicles and motorhomes 


Pros:

● Automatically Provided

Cons:
● Less comprehensive coverage
● Conditions and restrictions

3. Through Your Insurance Broker

Through your insurance broker, you have access to MPI’s Rental Vehicle Coverage, which is by far and away the best insurance option! It covers rented or borrowed private passenger vehicles, light trucks, motorcycles and mopeds, and it extends to both Canada and the United States.

When you buy MPI’s rental vehicle coverage through us, you get:

  • $10 Million of coverage for claims made against you (property damage or injury)
  • A low $100 deductible
  • Up to $100,000 for damage to vehicles rented outside of Manitoba
  • Coverage for up to 90 days
  • A replacement vehicle if you need one

And, you’ll pay a lot less than you would if you went through your rental vehicle company!

Pros:
● Most extensive coverage
● Best price

Cons:
● We can’t think of any! 

Purchase this option at any Winnipeg Insurance Brokers Ltd. branch.

Ready to hit the road?

Make us your first stop! We’ll help you secure your MPI car rental insurance so you can adventure with confidence.