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Dear Driving:
The cheapest solution is to ask your agent or broker to add a "27 endorsement" to your car insurance policy. This provides you with legal liability coverage for damage to non-owned automobiles -- such as a rental car. Many people request this endorsement, not only because they frequently rent cars, but also because they may be driving someone else's car from time to time.
Generally, it costs only about $25 per year to have this endorsement added to your policy, and it can be used at any time through the year.
Compare that with the "collision damage waiver" offered by the car-rental agency. This coverage costs about $12-$15 a day -- not exactly a pittance. The 27 endorsement would replace this coverage, and save you a considerable sum of money, depending on how long you need to rent the car.
You may also have a credit card that provides collision damage cover on rental cars. Many "gold" cards offer this feature. However, they may only cover damage to your rental vehicle if you, the cardholder, were driving it. Check with your credit-card company to see if the coverage includes any other drivers. Also ask if there are any limitations in terms of time period, territory in which the car is driven, or anything else that might affect your coverage. Keep in mind, too, that, because you have rejected the offer of insurance from the car-rental firm, you will have to negotiate with the credit-card company for any claims payments. You may even have to pay for any damage yourself up front, and then collect later from your credit-card company. The 27 endorsement, on the other hand, covers your spouse and all drivers listed on the policy.
The 27 endorsement covers you only for driving non-owned vehicles in Canada and the United States, including Hawaii. If you were driving internationally, you would have to purchase coverage elsewhere. Ask your insurance provider or travel agent.
Note: The preceding information is based on the Insurance Bureau of Canada's guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.
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