By Ka Hing Cheung

If your car is in the shop after a crash, you might get a rental vehicle through ICBC. But many drivers are surprised when the rental company asks them to pay for extra collision insurance—often around $20 a day.

That raises a fair question: If you already pay for Collision and Comprehensive coverage on your own car, shouldn’t that coverage apply to the rental vehicle?

The short answer is usually yes, but there are some important details to understand about rental vehicle coverage in British Columbia.

When Your Own ICBC Optional Coverage Transfers to a Rental Vehicle in British Columbia

According to ICBC, if your vehicle is being repaired or serviced and you temporarily use a rental vehicle or courtesy car, your Optional coverage—including Collision and Comprehensive—can extend to that vehicle.

This principle comes from ICBC’s “temporary substitute vehicle” provision. When your car is unavailable for normal use, you can drive another vehicle of similar type, and your existing coverage may follow you—so long as:

• You have permission to use the substitute vehicle.
• It’s being used as a temporary replacement while your insured vehicle is in for repair, servicing, loss, or destruction.
• You are not the owner or regular driver of that temporary car.

If all of that applies, you’re typically covered for damage to the rental vehicle under your own Optional Collision or Comprehensive policy. This provides valuable protection for drivers managing a claim after an accident and helps you handle the steps of the process with confidence.

Why Rental Vehicle Insurance Can Still Cost Extra

Here’s where confusion often arises. Even if ICBC covers you, rental companies have their own policies.

Most agencies automatically offer what’s called a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)—their version of rental vehicle coverage. If you decline it, they may:

• Ask for proof of your existing ICBC coverage.
• Place a large credit-card hold or deposit.
• Tell you they “can’t rent without insurance,” even though your ICBC policy already applies.

ICBC explains this in its article on rental vehicle insurance:

“Some rental companies may require you to buy their insurance or pay a larger deposit if you choose to rely on your ICBC coverage. ICBC will not reimburse you for any optional insurance you purchase from the rental company.”

So, while ICBC may have your coverage in place, the rental company’s staff might not be familiar with ICBC policies—or they may simply prefer you buy their product. These add-ons can make your trip more expensive than expected if you’re not careful during the booking process.

How ICBC’s Rental Vehicle Coverage Works

If you rent cars more often—or want guaranteed peace of mind—you can buy ICBC’s Rental Vehicle Coverage, which is a separate product that extends full protection to most passenger vehicles, courtesy cars, or other temporary substitutes.

For about $10 a day, or as part of packages like RoadStar or Roadside Plus, this coverage includes:

• Third Party Liability (up to $2 million)
• Collision and Comprehensive (with a $300 deductible)
• Loss of Use (reimbursing transportation costs if you can’t drive the rental)
• Underinsured Motorist Protection
• Enhanced Accident Benefits

You can read the full details on ICBC’s Rental Vehicle Coverage page.

For most drivers, this optional coverage removes the guesswork. You can walk into a rental agency, decline their add-on, and know your ICBC policy provides valuable protection.

What Happens When ICBC Pays for the Rental

In a not-at-fault accident, ICBC will often pay for your rental vehicle directly. In those cases, the rental car itself is typically booked under ICBC’s account with a rental partner like Enterprise or Hertz.

That means:

• You don’t pay the rental cost (ICBC does).
• The vehicle is already insured for party liability and third party liability.
• But collision coverage may not be automatically included unless you already had it on your own car.

If you carried Collision and Comprehensive before the crash, those coverages should extend to the rental vehicle as a temporary substitute. In that case, it’s usually unnecessary to buy the agency’s extra collision insurance.

However, if your original car did not have optional coverage, ICBC won’t insure the rental beyond the Basic Autoplan limits. You’d have to pay for the agency’s CDW or risk being liable for any damage to the rental vehicle.

A Practical Checklist

Before signing a rental agreement, follow these tips to avoid problems and handle your claim smoothly:

1. Contact your broker and ask whether your Collision and Comprehensive coverages extend to a temporary substitute vehicle.
2. Print or screenshot your policy (or bring your insurance papers) to show the rental agent.
3. Confirm deductibles—note that if you cause damage to the rental, your standard ICBC deductible applies.
4. Avoid paying twice: If you already have ICBC Rental Vehicle Coverage or the RoadStar package, there’s no need for the rental agency’s CDW.
5. Keep all receipts and rental documentation, especially if ICBC is covering the rental while your car is repaired.
6. Download ICBC’s rental vehicle guide for quick reference when traveling away from home.

When Paying Extra Makes Sense

There are a few rare situations where buying the rental agency’s insurance could still be worthwhile:

• If you’re renting outside Canada or the U.S., since ICBC coverage usually applies only in those regions.
• If the rental vehicle is a truck, SUV, or luxury vehicle that doesn’t meet ICBC’s “similar type” condition.
• If you want zero financial exposure—the rental company’s waiver can eliminate your deductible entirely, whereas ICBC’s will not.

For most BC drivers renting standard passenger vehicles after an accident, their ICBC rental vehicle coverage is sufficient.

Key Takeaway

If ICBC is paying for your rental vehicle after a not-at-fault accident and your own car already had optional coverage, you should not have to buy extra rental vehicle insurance.

That said, ICBC won’t reimburse the cost of any insurance the rental company sells you, even if you buy it out of convenience. Always confirm your coverage with your Autoplan broker prior to signing the rental agreement.

A quick call can save you hundreds in unnecessary fees—and make sure you’re protected from property damage or liability risks until your own car is back on the road.

About King Insurance

Located at the northwest corner of Marine Drive and Main Street, King Insurance proudly serves not only the South Vancouver communities of Marpole, Sunset, Oakridge, Victoria–Fraserview, and nearby areas like Marine Gateway and Marine Landing, but also clients across Richmond and the entire Lower Mainland. 

Ka Hing Cheung is proud to work in the insurance industry, helping people manage risk and protect what matters most. Ka Hing is committed to ongoing lea