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Borrowing, lending or renting a car for a short period of time: Are you covered?

November 21, 2017

Renting a convertible for road trip around California? Borrowing your friend’s truck on moving day? Doing your nephew a favour and lending him your car for the weekend? Want to know if you’re covered? Read on to find out.

Borrowing a car

Let's say you borrow your friend's car to go out and get groceries. As you back out of your parking spot, you don’t notice the car coming up behind you on the passenger side and bang! You come out unscathed, but the car door is badly dented and scratched.

What happens if your friend doesn’t have collision coverage? Will you be obliged to pay for repairs out of pocket? Does your car insurance cover you against damages to a vehicle that doesn’t belong to you? 

Your auto insurance may cover you…

If you own a car and have auto insurance, you can purchase coverage for short-term rentals or borrowed vehicles. The coverage is called “Civil liability for damage caused to vehicles of which named insured is not owner” or Endorsement 27 to insiders. It covers you if you damage a short-term rental or a borrowed car anywhere in Canada or the United States.

So if your friend asks you to pay for repairs, Endorsement 27 will cover the loss. That way you get to save your wallet and your friendship!

Lending out your car

To your child

Your eldest just got his driver’s licence and will be driving your car. Here are two good reasons why you should tell your insurer:

  • Your child will be insured on your auto insurance

It’s important to notify your insurer and add another driver to your policy. Your insurer will then be able to assess the level of risk involved. Failure to add your child as another driver could be very costly. For example, if your child is involved in an accident, you may be only partially compensated for damages to your vehicle.

  • Your child will gain experience and save money in the long run!

By adding your child to your policy, you’ll give him an opportunity to gain experience behind the wheel. That can save him money in the long run, when it’s time for him to shop for his own car insurance.

To a friend who doesn’t own a car

You’re out having dinner with friends. As the evening winds down, you realize you shouldn’t get behind the wheel so you hand your keys over to the designated driver. Since this is an exceptional situation, the designated driver (who has a valid driver’s licence, of course!) will be covered by your auto insurance, as if you were the one driving.

A friend who owns a car

It’s July 1st, moving day. In a burst of generosity, you lend a friend your car that’s bigger than his.What happens in the event of an at-fault collision? It’s your auto insurance policy that will cover you for damages. However, if your friend's insurance policy includes Endorsement 27, mentioned above, his insurer may cover the loss. It’s just a matter of looking at your respective coverages and deciding together what works best.

Will an accident affect your file?

After an accident, data on the people involved is entered in a central file called Fichier central des sinistres automobiles (FCSA). Information on both parties is entered even if only one of the parties files a claim. How will that impact your premiums? It all depends on the circumstances surrounding the incident and on your degree of involvement (at fault or not at fault).

Short-term car rental

I don’t have car insurance

If you rent a car for short period of time to travel within Quebec, you will need coverage for damages to a rented vehicle. You can purchase this type of insurance from the car rental company.

I have car insurance

If you are renting a car in Canada or the United States, you’ll want to make sure you are well protected. Endorsement 27 is available with your policy for just a few dollars and covers damages to rental vehicles (depending on the amount of insurance and conditions of your policy). Ask your insurer for details. You may not need extra insurance when you rent a car. If on the other hand you don’t have the coverage on your policy, you will need to purchase it from the rental company.

Tip: Do you have a Desjardins credit card? You may be entitled to discounts on short-term car rentals and even travel insurance coverage. Learn more!

Bottom line

So remember, if you want to borrow or rent a car in Canada or the United States, Civil liability for damage caused to vehicles of which named insured is not owner coverage (Endorsement 27) is a small but smart investment! Drive with peace of mind knowing you’re covered no matter what happens.

These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. We recommend using caution and consulting an expert for comprehensive, tailored advice.

In Quebec, Desjardins Insurance refers to Desjardins General Insurance Inc. In Ontario and Alberta, Desjardins Insurance refers to Certas Direct Insurance Company, underwriter of automobile and property insurance.