Will my insurance policy automatically cover my rental vehicle?

This is a common question that is asked of customer service agents at car rental companies all over the country. Many people assume that their auto insurance will follow them no matter what vehicle they are driving. This is not the case when it comes to rentals.  Your policy will not automatically provide coverage for a rental vehicle. Not knowing the exact details of your specific policy, employees at the car rental companies will not be able to give an accurate answer to your question.

In order for a rental vehicle to be covered, your policy needs to include several specific coverage options. First, you must have both collision and comprehensive coverage on your personal vehicle.  Collision coverage pays for damage that is sustained to your car when you hit another vehicle or object, and comprehensive insurance covers your vehicle against other losses, such as fire or theft.  Since both of these coverage options are not mandatory, it is possible that you do not have them added to your policy. This especially may be the case if your car is older, or if you are trying to keep your premium low.

In addition to these two options, you must also obtain an SEF 27 or “Legal Liability for Damage to Non-Owned Automobile” endorsement, which transfers the coverage from your personal vehicle to the rental vehicle.  Your broker can assist you in arranging for this additional coverage.

Car Insurance For Teens 101

For families with teenagers learning to drive, car insurance doesn't have to be confusing - and if you are smart, it shouldn't send you to the poorhouse either. Here are some ways to make sure you are getting the best coverage for your teen at the right time and at the best price.

When should you insure your teenage driver?

When your teen walks in the door with that learner's permit in hand, don't immediately see dollar signs floating out behind them. If your child has their first level of driver's licence (G1 in Ontario and Class 7 in other provinces), they are required to have a licensed driver in the car with them at all times. Since they are under constant supervision when behind the wheel, insurance companies often consider their risk of accident to be relatively small. As a result, insurers often do not "rate", or charge you if you will, for drivers who only have their first level licence. Even so, based on your original agreement with your insurer, you still have a responsibility to notify them there is now a Learner's/G1 licensed driver now in the household.

As soon as your teen is licensed to drive on their own (G2 in Ontario and Class 5 in other provinces), you are also required to report this 'material change in risk' to your insurance company and arrange for coverage for your teen.

Factors affecting a teen's insurance rate

One of the things that will affect your rate the most is if your teen has completed an approved driver-training course. New drivers can receive significant discounts off their insurance for the first 3 years they are licensed if they have driver training. It's a good thing to consider, since your insurance savings are usually greater than the cost of the course.

As a general rule, if your teen is female the impact on the parent's policy will be less than if your teen is male. This is because, statistically, young female drivers are a better risk for insurance companies than young male drivers.

The cost of adding a teen to your insurance policy will vary depending primarily on the type of car(s) you own, the age of your teen and their driving history.

Getting the best value for your insurance dollar

Your current insurance company may have given you a great rate when you shopped around last time, but when you add a teen to your auto insurance policy, that company may no longer offer the best option for you. It's important that whenever your insurance profile changes (marriage, moving, adding a new driver) do some research to make sure you are still getting the best rate available.

Your teen is probably excited about the prospect of being in the driver's seat. Don't let their excitement translate into overpriced auto insurance premiums