Renting a vehicle? Be very, very careful

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I visited a friend in Italy a few years back. Usually when I travel, it’s for work and someone else does all the arranging. I learned the hard way, however, that it is a skill I had been under-appreciating. I knew when my flight was arriving, and I arranged to pick up a rental car at the airport. I’d sorted out what I thought was a good deal. The plane landed, they couldn’t open the luggage hatch, and I stood around with a planeload of other people waiting. And waiting. Four hours passed. I couldn’t leave the gate to get the car, because then I couldn’t get back in to get my luggage.

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Exhausted and cranky, I finally arrived at the rental car kiosk. Through a mix of bad English and worse Italian, I was informed my car was gone. I had a time window in which it had to be picked up, and I’d missed it. No amount of interpretation was going to change it, and, oh, they didn’t have any other cars available. Did I mention it was prepaid? Because it was. I ended up at a different rental company counter, who were only too happy to rent me a car at twice the price. Lesson learned.

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Renting a vehicle? Be very, very careful Back to video

The devil is in the details, and if you want proof, rent a car, then have a mishap . Those ubiquitous lists of ways to save money often mention “don’t pay twice for car rental insurance; your credit card might already cover you.” They always tell you to check the fine print. As reported recently by Global News, sometimes even doing that isn’t enough. A B.C. woman landed in Calgary, and was told at the rental counter no cars were available. After the pandemic sell-off of vehicles by most of the major companies, scarcity has become a real issue this year. She was told they did, however, have a pickup truck ready to go. Like most of us would do, she figured that was close enough and agreed. She knew her credit card carried rental insurance, so she declined it on her contract.

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She was caught in a wicked hailstorm that caused considerable damage, and upon returning the truck she discovered her claim would not be covered by her credit card insurance. Why? It covered passenger cars, not pickup trucks. But maybe there was a third line of defence: her auto insurance policy. No joy. Like most places, basic insurance is exactly what it sounds like. If you want additional coverage for things like rentals, you have to add that to your policy. The Insurance Corporation of British Columbia (ICBC) is that province’s public insurer. It’s mandatory, but like most public insurance programs, it’s also basic unless you add on additional protections.

In Ontario, according to Debbie Arnold of Sound Insurance, you would require an OPCF 27 Endorsement. “Liability for damage to non-owned vehicles will cover the rented vehicle as long as it is a private passenger vehicle usually under a value of $50,000, under 4,500kg in weight, and usually for under 30 days. The value limit may vary from carrier to carrier, with some as low as $25,000 and others as high as $100,000. I tell my clients not to rent a Ferrari,” she says. The actual wording from the Financial Services Commission of Ontario (FSCO) is here . Arnold suggests you read and understand the wording of your insurance policy (call your broker if you need to), read all the fine print on your credit card wording (call them if you need to), as well as reading the rental car contract. Download one ahead of time.

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The woman in Calgary may have discovered her credit card wouldn’t cover her risk, but an Ontario man who rented a van from Home Depot back in March was stunned to find out that the only insurance coverage he had on the rental was his own insurance policy. We’re so used to hesitating over that little “additional insurance” box, it’s surprising to find out the home renovation giant doesn’t even offer it.

He had the misfortune of hitting a deer while transporting a load for a friend, as reported by CTV News . Learning of the heavy damage ($18,873, all in) sustained by the vehicle (the deer died), he was shocked to discover his own insurance company was on the hook for repairs. Home Depot policy is that renters provide proof of insurance for Vehicle Loss and Damage, and their Terms and Conditions point out that is where the liability claim will fall. It’s there in the fine print, but I can understand his confusion. If there is a slight silver lining, hitting a deer is a comprehensive claim. It’s probably a non-chargeable loss, and his rates would not increase. Beware: showing that little pink slip but not actually having insurance still leaves you on the hook.

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Arnold points out the double-whammy that could be facing those who rent Home Depot vehicles: without that additional endorsement covering rentals on your policy, you will be taking on the cost of repairs out of your own pocket. As it stands, you will still be paying your deductible. 

“I have rented one myself,” says Arnold, “and confirmed with my insurer that because I have the OPCF 27, the van is covered.  People run into issues when they rent a moving cargo van from U-Haul because it’s over that [4,500 kg] weight limit.” Before you rent anything to move either a dishwasher or a household of furniture, check with your agent or broker.

Rent with caution. Fleets are lean, prices are high, reserving winter tires in Canada or an automatic transmission in Europe are both subject to availability and not guaranteed, and you need to read three sets of fine print carefully: the rental contract, the credit card you use (usually has to be the same one you book with), and your own insurance policy. At-fault or not, you never want to be caught with a surprise after the fact