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Q. E.F. 27

September 11, 2011

Harry can be a little bit pushy sometimes.  The other day he cornered me and absolutely insisted that I write the column that he had in mind immediately if not sooner.  He had just had a revelation that he felt I should bring to everyone’s attention.  Harry thought this topic was hot particularly as people were heading off for the winter vacations and searching for warmer climates.


I always like it when people suggest columns to me and was happy to hear him out.  While his “brilliant idea” was not exactly earth shattering it was worth following up on.  Apparently Harry had just renewed his automobile insurance and his insurance broker was proud to point out that his new policy, just like his previous policy, contained a QEF 27 endorsement.


This means that in addition to his regular coverage he was also covered for “civil liability for damage to nonowned automobiles”.  In other words he was covered for rental cars as well as any other car that he might borrow up to the limits of the policy.  Third-party damage was covered for up to $1 million while loss or damage sustained to the rental car or borrowed car was covered up to a maximum of $75,000.  Not all insurance policies are created equal and some may have different terms and conditions than listed above.


One thing they all have in common is that “this endorsement is invalid when the vehicle is used without the consent of the person who owns it or the lessee.”  In other words if you steal a car and damage it your insurance is not going to cover the damage.


Harry was all excited to hear that he had this type of coverage and would no longer have to pay the extra 10 to $15-$20 per day for collision insurance when renting a car.


As usual Harry is both right and wrong.  While it is true that the QEF 27 endorsement does mean that it is not necessary to purchase additional insurance when renting a car it also means that any accident that you may have with your rental car will be paid for by your insurers and be added to your driving record.  This could lead to an increase of premiums in the future if the accident is deemed to be your fault.


Paying the additional charge per day for added collision insurance might be worth it if you are driving an unfamiliar type vehicle in unfamiliar territory or anywhere else are you may be likely to have an accident.  Since an accident could happen anywhere the added protection may be the way to go.


Many premium credit cards also come with rental car coverage at no additional charge.  Make sure you check out the policy that comes with your card to make sure it adequately meets your needs.  Different credit cards provide different coverage and sometimes the type of vehicle you rent may not be covered at all.


Your credit card coverage may not be available in all countries while your QEF 27 endorsement will most likely be good anywhere in the world.


On the other hand this endorsement will completely cover you when you borrow a friend’s car with his or her permission up to the terms limits of the policy.  This endorsement is not always free nor does it come with every single insurance contract but it is useful to have, usually reasonably priced and well worth having.


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