Whether renting automobiles for personal use or business, you must be aware of all possible automobile loss exposures. Suppose you or any listed driver under your current policy decides to rent a vehicle anywhere across Canada and the United States. In this case, you will have to bear the liabilities in the event of any damage that may happen to the vehicle. After an accident, you must ensure that your current policy covers and protects you against all possible legal as well as financial ramifications.
In this article, we shall cover the pertinent details of liability to non owned automobiles insurance coverage in Canada. Alternatively, if you are looking to save up to 25% on your car insurance, check out Surex.
Personal non-owned automobile insurance
If you want to borrow or rent an automobile for any purpose like a vacation or other short-term requirements, your personal automobile policy might not be sufficient to cover you during eventualities. In a province like Ontario, it depends on whether or not the OPCF 27 endorsement is added to your policy.
The OPCF 27
Also known as the Legal Liability for Damage to Non-Owned Automobiles, it is one of the Ontario Policy Change Forms that can be added to your existing automobile policy. Most rental companies charge a daily insurance fee that can rack up to a substantial amount when renting for a longer duration. And since adding OFCF 27 costs either $50 or less annually, it is often cheaper even if you want to rent only once. Its features include:
- You can avail both collision insurance and comprehensive insurance in case the borrowed or rented vehicle is damaged.
- Accident benefits and third-party liabilities will also apply to all borrowed or rented vehicles.
- However, this is only applicable if you are driving in Canada or the United States.
OPCF 27 and rental cars
The OPCF 27 can act as a suitable replacement for rental car insurance, a standard coverage offered by the rental company. And as discussed, opting for this endorsement instead of the standard rental car insurance enables you to save money, particularly in the long run.
In case you are unsure if you have OPCF 27 added to your standard coverage, it might be a good idea to consult your insurer before you finalize the rental. Having said that, there are a few limitations to OPCF 27 that you should be aware of:
- The endorsement is only applicable to standard vehicles that are lighter than 4500 kilograms
- OPCF 27 does have a coverage limit ranging from $25000 to $50000
- For rentals, the endorsement is applicable up to 30 days
- Only you and drivers that are listed under the policy can avail this coverage
As clarified, OFCF 27 is an optional endorsement. If you exclusively drive your vehicle, you do not need to opt for this. However, if you often have to rent or borrow vehicles for different purposes, it is a good idea to opt for this endorsement. Ultimately, your driving habits will dictate its necessity.
Liability to non-owned automobiles insurance coverage for businesses
Even if your business is well covered in terms of proper coverage for the operation fleet, there might still be potential automobile loss exposure that can go undetected. Risks may arise if one of the employees decides to operate their private vehicle for business and gets involved in damages. There may be potential losses under these circumstances, and in many cases, you and your business may be held liable for the actions your employee takes even while driving their vehicles for company business.
Basic business automobile policies are insufficient in these circumstances as they only consider company-owned vehicles being driven for business purposes leading to your business being sued to make up for damages. And even though the employee has personal automobile insurance to protect both themselves and the business while driving their vehicles, the charges may exceed the policy limits of the personal insurance.
In such a case, the company will have to bear the remainder of the expenses. This may rack up a sizeable amount causing a costly exposure for your business without non-owned automobile liability coverage.
Non-owned and hired automobile liability coverage
In a province like Ontario, you can opt for non-owned and hired automobile liability coverage that protects your business against many forms of legal liability for damage to non owned automobiles and will automatically kick in the case of an accident in the circumstances mentioned above. This type of coverage will kick in to cover property damages as well as any bodily injuries to your employee or others even if:
- Your business renting or hiring vehicles, just like personal non-owned coverage
- Employees driving other vehicles, including their own, for purposes of the business
You can get the coverage added to your general liability policy or even the business automobile policy. This way, you can ensure that you do not suffer the financial consequences of an accident your employee got involved in, even driving vehicles your business does not own. In Ontario, this can be added as an endorsement, the OPCF 27B or the Liability for Damage to Non-Owned Automobiles in Your Care, Custody or Control.
Applicability of OPCF 27B
If you are a business owner in Ontario and you frequently need to hire or rent vehicles for business purposes, getting non-owned and hired automobile liability coverage will be prudential. If you are unsure about how you are covered, you must speak to your insurance provider and add it on to secure your business further.
Liability to non owned automobiles insurance coverage — Conclusion
While driving a vehicle, whether, for personal or professional purposes, you must always ensure adequate coverage. Not being aware of potential automobile loss exposures can often cost you dearly in terms of monetary loss as well as the availability of critical healthcare.
By incorporating Liability for Non-Owned Automobiles Insurance in Canada, you can ensure complete peace of mind in case of any major or even minor accidents for you or the third party. Speaking to your insurer at the earliest is the best way to ensure such coverage.