For occasional, short-and long-term rentals of vehicles, your MEARIE insurance can cover your physical damage and third-party liability exposures. In some cases, you may need to request a specific endorsement to ensure coverage is in place.
There are different circumstances where your organization may rent vehicles for business use. For instance, a business trip may require a short-term rental car; or your company may need to rent a pick-up for a few months or longer. Depending on the rental type, different coverages may apply, between the non-owned auto under the MEARIE Liability or vehicle coverage under the regulated MEARIE Fleet/Vehicle policy. Some coverage is automatic; some is not. This bulletin provides information to ensure coverage for both third-party liability and physical damage is in place for rental vehicles in the different rental scenarios.
The following applies to private passenger and light truck rentals only. For heavy truck rentals, MEARIE insurance does not apply and must be purchased from the rental company.
What is a Short-Term versus a Long-Term Rental?
Based on Ontario auto regulation, the definition of a short-term rental vehicle is any vehicle not owned by the Insured that is rented or hired for a period of less than 30 days. If the rental period is longer than 30 days, it is classified as a long-term rental. This distinction is important in determining which MEARIE policy may provide coverage.
Long-Term Rentals – Beyond 30 Days in Length
For long-term rentals - greater than 30 days - coverage is available under your MEARIE Fleet/Vehicle policy. The vehicle must be listed on your vehicle schedule and additional premium will be assessed. In many instances you may be required to show proof of insurance from MEARIE prior to pick up of vehicle. MEARIE will provide a certificate of insurance as evidence of coverage under your MEARIE Vehicle policy upon request, subject to the terms and conditions of your policy.
Long-Term Rentals – in Excess of 30 Days in Length – on “Rolling” Contracts
There may be circumstances where a long-term lease is not the solution, but the vehicle is needed for longer than 30 days. Some Members have adopted a practice of renting vehicles (private passenger or light trucks) on 30-day individual contracts that are then renewed in a roll-forward pattern for multiple periods.
Because these vehicles are on ‘short-term’ agreements but are being kept for longer periods, a different solution applies. An endorsement to the MEARIE Fleet/Vehicle policy (OPCF27B) must be requested to be added to your company’s policy. To add either type of long-term rental vehicle to your policy, complete a MEARIE Vehicle Change Form and submit it to insurance@mearie.ca. Additional premium will be assessed.
Short-Term Rentals for Occasional Use
The MEARIE Comprehensive Liability policy includes the “non-owned auto” endorsement. This provides coverage for short-term rentals of less than 30 days, for business use, provided the rental agreement is under the Named Insured or the Additional Named Insured. The key is for the rental agreement to clearly show the company’s name as the renter (not the individual driver’s name. The individual will be listed on the rental agreement as the primary driver).1
Consideration should be given to arranging short term rentals as follows:
-
- Set up a corporate account with a car rental company for all corporate business rentals
- Ensure the rental vehicle use is for approved company business
- The Rental agreement must be in the name of the company with the individual listed as the primary driver; additional drivers must be named on the agreement
- If using a corporate credit card, optional Collision Damage Coverage may be waived (subject to the terms and conditions of the credit card company related to car rentals). Insurance would only be valid if the card holder is listed on the rental agreement as the primary driver
Arrange for a certificate of insurance from MEARIE for the short-term rental prior to the pickup of the vehicle if requested by the rental agency.
To re-cap, regarding vehicle rentals and insurance:
-
- Only private passenger or light truck company vehicles (rented in the name of the company) can be covered by MEARIE insurance
- MEARIE Comprehensive Liability policy is for short term rentals of less than 30 days, for occasional, business use
- MEARIE Fleet/Vehicle policy is for long term rentals greater than 30 days – whether on a single, long-term contract, or on rolling contracts
- For long-term rentals – beyond 30 days, on single or ‘rolling’ contracts - vehicles must be added to the schedule on the policy and additional premium applies
- For heavy truck rentals, the insurance must be purchased from the rental agency
Contact insurance@mearie.ca for further support on your insurance & risk management needs
