Your Insurance Policy
Your auto insurance policy provides the best coverage if you purchase car rental coverage. The coverage is called "Liability for Damage to Non-Owned Automobiles." It should cost around $35 to $50 a year and it covers you each time you rent a car.
The liability and collision coverage from your own policy then applies to the car you rent. That means if you get into an accident and damage the rental car, it's covered. If you damage another car, it's covered. If you are injured, or injure someone else, you're covered.
Talk to your broker about this coverage, but note, it does not extend to someone else driving the rental car if they are not listed as being insured on your policy. There are also limits in Canadian dollars to the amount of damage which the insurance company assumes and that the coverage is only available for personal use, not business use.
Car Rental and Card Card Insurance
Most coverage purchased through rental companies, or credit cards, only offer coverage on the car you're renting (collision coverage) but may not extend to cover third party liability. That means if you get in to an accident and damage another vehicle, you're responsible. If you are injured or injure someone else, you're responsible. Some contracts also do not offer the same protection if you are at-fault in the accident or if you are charged in the accident. Be careful of these limitations of coverage.