Car rentals and S.E.F. 27

You’re handing over the keys as the rental agent mentions a damage charge and you suddenly find yourself replaying the moment you first rented the car. At the time, declining the extra rental car insurance seemed fine since you already have car insurance and you drive carefully. Plus, you’ve rented cars before and nothing has ever happened.

That’s when most people start asking questions they didn’t think to ask earlier. Was the rental car covered under their own policy? Did declining the rental company’s coverage actually matter? And what exactly is an S.E.F. 27 endorsement? Below, we’ll walk you through how S.E.F. 27 works in Alberta, how it compares with rental company options or credit card coverage and when it may or may not be enough on its own.

Key takeaways

Here's what you need to know:

• SEF 27 can extend your existing vehicle damage coverage to a rental car, depending on what your policy already includes.

• The endorsement follows the same limits and deductibles as your own policy

• Similar endorsements exist under different names in several provinces

• Rental company waivers and credit card coverage work differently and come with their own conditions

• Checking your coverage before you rent can help you avoid sorting it out after something goes wrong.

What does SEF 27 rental car coverage in Alberta cover?

S.E.F. 27 or SEF 27, formally called Legal Liability for Damage to Non-Owned Automobile, is an optional endorsement that can be added to your personal auto insurance policy. It allows the physical damage coverage you already carry on your own vehicle to apply when you’re driving a rental or other non-owned car.

If your personal auto policy includes collision or comprehensive coverage, SEF 27 allows those protections to respond if a rental vehicle is damaged while you’re using it for personal purposes. In general, SEF 27 applies to:

• Short-term rentals for personal use

• Private passenger vehicles

• Non-owned vehicles within Canada and the United States (U.S.)

What does SEF 27 not cover?

While SEF-27 and similar endorsements can offer protection, they don’t close every gap. What isn’t covered on your own policy generally isn’t covered here either. Some common limitations and gaps include:

• Coverage only applies to physical damage under what you carry, so you must have some form of collision and/or comprehensive coverage on your regular policy.

• Rental company charges, like loss of use or administrative fees, may not be covered unless specifically included.

• Heavy vehicles, trucks, moving vans or commercial rentals may be excluded because they’re not defined as “private passenger vehicles.”

• Vehicles used for business purposes or non-personal travel generally aren’t eligible.

• You may still face a deductible on your own policy if you make a claim under SEF 27.

• It generally doesn’t apply outside Canada and the U.S., including trips to Mexico.

Please note that SEF 27 and similar endorsements deal with damage to the rental vehicle itself, not liability coverage for injuries or damage to others, which is handled separately under your auto policy.

SEF 27 vs. CDW vs. credit card coverage

Rental vehicles in Canada are often protected through one of three avenues. Here’s how they differ:

It’s important to note that while credit card coverage varies by issuer, many require the entire rental transaction to be paid entirely on the credit card and the collision damage waiver to be declined for you to qualify. It’s a good idea to check your credit card’s rental coverage details with your credit card company before relying on it.

Is SEF 27 available in other provinces?

Sort of. The same general concept appears throughout parts of Canada, but the name may change depending on where you live. Here are some examples:

Other provinces may offer similar endorsements under different names, though the wording and conditions can vary. Provinces with public insurance systems, such as British Columbia, often handle rental vehicle coverage differently and may not offer a direct SEF 27 equivalent.

How can I confirm if I have the SEF 27 endorsement?

To confirm whether you have this coverage, you can:

• Review your policy declarations page, where you’ll find a list of your endorsements

• Ask your BrokerLink broker how rental vehicles are treated under your policy

When should I buy the rental company’s insurance anyway?

There are situations where purchasing the rental agency’s coverage can still make sense. For instance, it may be worth considering if:

• You don’t carry SEF 27 or a similar endorsement

• Your deductible is high

• The vehicle you’re renting doesn’t qualify

• You want to avoid filing a claim with your insurer

• You’re travelling outside of Canada or the U.S.

For short rentals, the additional cost of the damage waiver may feel manageable. But for longer rentals, you may want to review your policy first to help you prevent any unnecessary expense. Ultimately, it often comes down to how comfortable you are with uncertainty.

Your final checklist before your trip

Before renting a car, here are some important steps to help make sure you have the right insurance coverage in place:

• Review your personal auto insurance policy to see if it covers rental vehicles and whether you have the necessary endorsements, such as S.E.F. 27, for damage to non-owned automobiles.

• Check your credit card agreement for rental car insurance benefits, including collision damage waiver and liability coverage and understand any requirements or coverage limits.

• If your personal auto policy or credit card coverage is not adequate, consider purchasing a collision damage waiver or liability insurance directly from the rental car company.

• Carefully read the rental agreement and insurance policy details before signing, paying close attention to coverage, exclusions and limitations.

• Consult your insurance broker if you have questions about your insurance coverage or need help understanding your options for renting a car.

• Choose a reputable rental car company and be aware of any additional fees or charges that may apply to your rental agreement.

• Keep copies of your insurance policy and rental agreement with you during your trip for easy reference in case of an accident or claim.

Running through this list ahead of time can help you make sure you have adequate coverage before you rent, so you’re not left sorting it out after something goes wrong.

Learn more with BrokerLink

If you’re planning to rent a car and want to know how your auto insurance may respond, our BrokerLink brokers are here to help. We can review your policy with you and help you understand where coverage may apply and where it may not.

Whether you’re shopping for car insurance or have further questions about rental car insurance, know that our experienced team has got you covered. You can reach us by phone, email or in person at any one of our locations throughout Canada. You can also take advantage of our free online quote tool, which can provide you with a competitive quote in minutes.

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