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Using a Car Share Service? Charge it to Your Premium
With car-ownership costs going ever-higher, car-sharing services have become a popular alternative for people in urban areas who only occasionally need a car. These services have become popular in Vancouver, where parking is at a premium and insurance rates are some of the highest in Canada. There’s always a catch, so what is it with car shares? It’s your insurance deductible if you are found to be at-fault in an accident. Car2Go in Vancouver has mandated a $1/trip surcharge to lower your deductible to $250, Modo has it at $500, Evo and Zipcar charge up to $1000. These companies (aside from Modo) don’t allow you to purchase additional insurance to lower your deductible, so what can you do? Use a Collision Damage Loss Insurance policy to avoid having to pay the deductible.
The usual CDL Insurance policy
Collision Damage Loss Insurance covers any damage to the vehicle you have rented if the damage is your fault. This insurance is often sold as an expensive add-on by car rental companies, and is also available on high-end credit cards. The average demographic of car-share users, young adults, often do not yet have high-end credit cards which include CDL Insurance, but this is changing. Many cards, including $0 annual fee cards, now include this insurance; one can check the insurance policy pamphlet that came with their card or call their bank to see if it’s included. The usual Collision Damage Loss Insurance coverage only applies to the damage that you cause to the car you’ve rented, from the time you pick it up to the time you drop it off. That means there’s plenty of things it doesn’t cover, such as:
- Your personal items
- Any other car you hit
- Injuries to any person
- Injuries to yourself
- Any other property you damage
- Everything, really (except that car)
These other items are covered by the third-party insurance that the car-share company buys, except for you or your personal items. Could the same thing apply to your car-share trip? Why not? You pay money, get into a car, drive it, and then leave it. Visa states on its website that car-share trips are covered by their Collision Loss Damage Insurance, if included on a card. MasterCard’s website is silent on the issue, but if you read your insurance policy, you might find you’re also covered.
How you get it
Thankfully, this is possibly the easiest insurance to use. Put the cost of your trip on your credit card that includes Collision Loss Damage Insurance as a benefit! Car sharing corporations have also gotten wise to this. Evo notes they will assist you with getting that deductible covered by your credit card insurance, and Modo says they will even direct-bill your credit card insurance for you. Your credit card insurance pamphlet will describe what you need to do to get the insurance if you’re in an accident.
I cannot emphasize this enough: be sure you read your insurance policy. Your policy will usually include important steps to follow to use the insurance coverage. Some credit cards don’t have collision insurance, or place conditions on coverage. If you break those conditions, e.g. driving on a dirt road or driving a truck, you’re not insured. If you have the misfortune of hitting something or someone but don’t damage the car, or damage the car for less than the full deductible, the deductible isn’t covered. There is no substitute for understanding your cardholder insurance policy, so read your policy or call your card issuer to be sure.
Mark Trischuk is an Articled Student, MacLeod & Company Legal Counsel.
Disclaimer: This article is not meant to answer every question about car-rental insurance, only to inform about a benefit you may already have. The above is not to be considered legal advice.…