Driving or renting a car while on vacation gives you the freedom to do what you want. However, to choose the right car insurance for your needs, you should evaluate all of your options. How can you make the right insurance choices before hitting the road?
While some Canadian provinces cover personal injury sustained in a car accident within their borders, it’s often your car insurance that covers third-party liability and property damage, especially in the case of travel. Depending on where you travel, and what you’re driving, your car insurance doesn’t always work the same way. Here are some important ways to stay in the know.
Before you leave, the best move is to verify both the coverage of your car insurance policy as well as your travel insurance. Be prepared to adjust your coverage if needed. There are three possible options to obtain adequate coverage: personal car insurance, insurance offered by your credit card or insurance from a rental agency.
In Ontario, car owners must have third-party liability insurance of at least $200,000 to cover property damage, injury or death resulting from an at-fault accident. Meanwhile in Québec, third-party liability can be as low as $50,000. In either case, this protection may be insufficient when driving abroad. In the United States, for example, it is recommended that the amount of third-party liability insurance be $2 million. For only a few more dollars on your premium each month, the peace of mind can be worth it.
But what if you’re not driving your own vehicle and instead renting a car? Most full-protection contacts have a clause included when renting a car in Canada or the United States. However, it is always better to confirm this clause with your insurer and verify that the coverage amount is sufficient for the type of vehicle you are renting. When it comes to coverage for property damage, National Bank’s QEF-27 endorsement protects your rental vehicle as if it was your own.
Many credit cards offer car insurance if you pay for your rental with the card. CAA recommends validating the scope and conditions of the protection offered. For instance, if you are driving across several countries, you may not be covered everywhere. There may also be constraints concerning the duration of coverage or the selection of certain models of cars, such as vans, luxury cars or recreational vehicles. Above all, ensure that you have third-party liability protection, as it is not always offered by default.
Insurance offered by rental companies is often more expensive than the previous options because you can purchase it on the spot instead of prepaying. Prices are determined according to the vehicle model, rental location, age of the driver and the number of drivers. To avoid paying twice as much, make sure you don’t already have third-party liability coverage of $2 million and coverage for property damage with the QEF-27 endorsement.
Before you hit the road, take time to familiarize yourself with the laws of each country you will be visiting. Traffic regulations and road signage are also subject to change. Speak with your insurer to provide them with your itinerary and validate your coverage.
In addition to the $2 million third-party liability coverage, it is generally recommended that you have collision insurance. When a third party is responsible for an accident, this protection will help you avoid having to appear in court to receive compensation.
In most states (excluding Georgia), you do not need to have an international driving permit: a Class 5 driver’s licence is usually sufficient for renting a car or recreational vehicle. However, the minimum age for renting could vary between 21 and 25 years old.
The moment you cross the Mexican border, your Canadian auto coverage will cease. Therefore, motorists heading to Mexico are required to purchase separate, Mexican auto insurance coverage. This can be done at the border, but it’s generally cheaper to purchase online.
If you rent a car in the United States with the intention of crossing into Mexico, you should notify the rental company of your plans. For a vehicle rented on Mexican soil, it is preferable to sign up for the complete coverage offered by the rental company.
Your personal insurance policy does not apply in Europe and you must sign up for the rental agency’s coverage for adequate protection. In Italy, for example, an insurance policy imposed by the government is already included in the package price. European buy-back plans generally include complete coverage.
International driving licences may be required in certain countries. Before leaving, find out if you need one, and always have both permits in hand when driving.
The QEF-27 endorsement does not apply when you rent a motorcycle, and credit cards do not cover this type of vehicle. The only third-party liability and property damage insurance available is offered by the rental company. For security reasons, do business with a well-known company that has a stellar reputation. You must possess and present a valid driver’s licence whose class corresponds to the category of the desired motorcycle.
Here is a list of documents to keep with you on the road:
Every trip requires preparation, and good communication with your insurer is the most effective way to handle the unexpected. Whether before or during your travels, don’t hesitate to contact them for more specific advice or information.
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