Automotive

[Insurance] Does Liability coverage follow you when you drive a rental car?

  • Last Updated:
  • Aug 23rd, 2019 11:09 pm
[OP]
Deal Addict
Jan 26, 2016
1632 posts
1464 upvotes
Toronto, ON

[Insurance] Does Liability coverage follow you when you drive a rental car?

Does the liability portion of your own insurance policy (ex. $1M) automatically cover you when you drive a rental car?

Rental cars only come with $200k liability, which is not enough.

Does Endorsement 27 need to be added for this?

Thanks!
12 replies
Deal Expert
Aug 22, 2011
34412 posts
20445 upvotes
Center of Universe
WinterSleep wrote: Does the liability portion of your own insurance policy (ex. $1M) automatically cover you when you drive a rental car?

Rental cars only come with $200k liability, which is not enough.

Does Endorsement 27 need to be added for this?


Thanks!
Yes.
Deal Guru
Jan 12, 2017
12521 posts
3390 upvotes
Scarberia
also u cant lend out the rental to someone and they get into accident, ur screwed right? rental only covers YOU as the person driving, unlike ur regular car where if u lend it out its covered huh
*SIG: Ryzen R5 2600 cpu w/ ASrock B450M OCd to 4.0ghz@1.265v stock cooler 16gb ram win10 pro w/radeon rx460 rogers Gigabit<< xb1 gamertag: mikka2017 >>
Deal Expert
Aug 22, 2011
34412 posts
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Center of Universe
mikka2017 wrote: also u cant lend out the rental to someone and they get into accident, ur screwed right? rental only covers YOU as the person driving, unlike ur regular car where if u lend it out its covered huh
If the person is listed as a driver on the rental agreement, they are covered.
Deal Addict
Aug 15, 2009
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Montreal
Check with your insurer. Better know what they think then to be sorry.
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User avatar
Mar 19, 2015
267 posts
250 upvotes
North York, ON
The 27 Endorsement is for “legal liability for damages to non-owned vehicles” and typically refers to the physical damage component of a vehicle you rent. The 27 Endorsement doesn’t necessarily extend “Section 3 - Liability” (for bodily injuries) to the rental.

That’s because “Section 3 - Liability” has a provision in it to automatically extend to any vehicles you drive.

The priority of payments as it relates to Section 3 is 1) renter, 2) driver, and 3) owner of the rental. The owner of the rental has a maximum exposure of $1M but they can subtract any amounts available to the renter and driver from their $1M exposure.

For purposes of “Section 3 - Liability”, you let a friend drive your rental vehicle and they injure someone, the renter’s liability limits are exposed first before the driver’s become exposed. So when you do this, you’re essentially lending your insurance to your friend as well.
[OP]
Deal Addict
Jan 26, 2016
1632 posts
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Toronto, ON
Squirtle wrote: The 27 Endorsement is for “legal liability for damages to non-owned vehicles” and typically refers to the physical damage component of a vehicle you rent. The 27 Endorsement doesn’t necessarily extend “Section 3 - Liability” (for bodily injuries) to the rental.

That’s because “Section 3 - Liability” has a provision in it to automatically extend to any vehicles you drive.

The priority of payments as it relates to Section 3 is 1) renter, 2) driver, and 3) owner of the rental. The owner of the rental has a maximum exposure of $1M but they can subtract any amounts available to the renter and driver from their $1M exposure.

For purposes of “Section 3 - Liability”, you let a friend drive your rental vehicle and they injure someone, the renter’s liability limits are exposed first before the driver’s become exposed. So when you do this, you’re essentially lending your insurance to your friend as well.
I am a bit confused.

Which section of the policy are you referring to? Section 2.2.2 in OAP 1 seems to support what you talk about.

But on the FSCO website, they mention this with Endorsement 27:

Image

Also, my insurance broker told me I MUST keep OPCF 27 if I want even THIRD PARTY liability to extend to rented vehicles, which I am still thinking is incorrect advice - as long as my credit card covers the physical damage, my policy OUGHT to take care of liability as a result of driving the rental car. But I don't know who is in the right!
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User avatar
Mar 19, 2015
267 posts
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North York, ON
No, the OPCF27 refers to physical damage coverage, not liability coverage.

Section 3.3:

What We Will Cover:
You or other insured persons may be legally responsible for the bodily injury to, or death of others, or for damage to the property of others as a result of owning, using or operating the automobile.

This section doesn’t only refer to Described Automobiles, rather, ANY automobile (described, or non-described).

Source: I work in insurance litigation.
[OP]
Deal Addict
Jan 26, 2016
1632 posts
1464 upvotes
Toronto, ON
Squirtle wrote: No, the OPCF27 refers to physical damage coverage, not liability coverage.

Section 3.3:

What We Will Cover:
You or other insured persons may be legally responsible for the bodily injury to, or death of others, or for damage to the property of others as a result of owning, using or operating the automobile.

This section doesn’t only refer to Described Automobiles, rather, ANY automobile (described, or non-described).

Source: I work in insurance litigation.
So my broker said the wrong thing then.

So is this the section that extends coverage to not just "described" automobile, but to all other cars, including rental cars?

(Does this mean, that if I drive a friend's car, and I hit someone, and find out he didn't have insurance, I am still covered?)
Capture.PNG
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Mar 19, 2015
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North York, ON
WinterSleep wrote: So my broker said the wrong thing then.

So is this the section that extends coverage to not just "described" automobile, but to all other cars, including rental cars?

(Does this mean, that if I drive a friend's car, and I hit someone, and find out he didn't have insurance, I am still covered?)
Capture.PNG

Correct. This section covers you for third-party liability for when you drive a vehicle not described on the policy (rental vehicle, friend's vehicle, etc.) - so long as you have permission to do so.

In the scenario you gave, you would need to demonstrate you did not have knowledge of your friend's vehicle having invalid insurance (because if you were aware he didn't have insurance, you would be excluded for coverage under the Insurance Act of Ontario).

Interestingly enough, if you are injured while driving your friend's uninsured vehicle, and you don't have any insurance policy of your own that could respond, you can claim Accident Benefits from any of the other vehicles involved (regardless if they were at-fault or not).

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