How the Best Credit Cards for Car Rental Insurance in Canada Work
Determining if you should buy car rental insurance is confusing. It’s even more confusing when the rental agent gives you a hard sell at the counter and asks “are you sure your credit card covers that?” To play it safe, many Canadians opt in for the optional insurance offered by the car rental agency, but that could be a mistake.
Although your credit card car rental insurance probably won’t cover all your needs, it likely does provide at least a decent amount of insurance. More importantly, if you accept the collision damage waiver (CDW) or loss damage waiver (LDW) from the agency, your credit card car rental insurance will likely no longer be valid.
To help you figure out what your credit card covers you for, we’ve put together this credit card car rental insurance guide that will answer all your questions. Remember, every travel insurance policy is different so you always need to read the fine print.
Summary of Car Insurance Coverage Per Credit Card
|Annual Fee||Coverage Amount||Number of Days Covered||Additional Coverage||Card Review|
|American Express Gold Rewards Card||$150||$85,000||48||N/A||Read More|
|Desjardins Odyssey World Elite Mastercard||$130||Up to actual cost of current value||48||N/A||Read More|
|BMO World Elite Mastercard||$150||$65,000||48||Accidental Death & Dismemberment, personal effects||Read More|
|The Platinum Card from American Express||$699||$85,000||48||N/A||Read More|
|Rogers World Elite Mastercard||$0||$65,000||31||N/A||Read More|
What You Need to Be Covered for When Renting a Car
When renting a car you should consider the possibility of misfortune to your own vehicle/property, as well as the vehicles/property of others. These are the types of coverage you need to keep an eye out for:
- Damage to the rental vehicle
- Theft of the rental vehicle
- Damage to another person’s vehicle
- Injury to another person
- Property damage
- Loss of use of the rental vehicle while it’s under repair
Generally speaking, as long as you charge the full amount of the rental to your credit card and decline the rental company’s collision damage waiver, your credit card car rental insurance will cover you for damage/theft to the rental vehicle, and the loss of use of the rental vehicle while it’s under repair.
Two key things to understand are as follows: despite the fact that your policy may say it covers you for $65,000 or $85,000 in damages, that usually maxes out at the current value of the car. Your credit card car rental insurance will not cover third-party liability, which covers damage to another person’s vehicle and injury to another person.
Each province in Canada sets its own level of minimum third-party liability that must be provided by the rental company. The minimum amount of third-party liability insurance required by law in Canada is $200,000, but many car rental companies have policies that cover you up to $1,000,000. Within Canada, you needn’t purchase additional liability insurance since it’s legally required to come with the car.
If you’re renting a car in a country where there are no laws about liability insurance, you can likely purchase additional insurance directly from the car rental agency so that you’re covered there. If you own a vehicle and have car insurance at home, check your policy as it may already include third-party liability insurance that you can utilize abroad.
What to Watch Out For
If you want to take advantage of your credit card’s card rental insurance, there are several conditions and exclusions you should be aware of prior to renting a vehicle:
- You must be a Canadian citizen with a valid driver’s license.
- You must charge the full amount of the rental to your credit card.
- Some types of cars are usually not covered, such as pick-up trucks, commercial vans, antique cars, and luxury cars (over $65K or $85K).
- Travel in some countries may not be covered by your credit card’s car rental insurance, e.g. in countries for which the Canadian government has issued a formal travel advisory.
- Your credit card account must be in good standing.
- 31-48 days of rental is the maximum that your credit card will likely insure you for.
- If you book your car rental as part of a travel package, you’re still required to charge the full amount of the rental to your travel credit card.
- If your car rental is provided due to winning a contest, your car rental insurance would apply if you have a history of paying your car rentals with the credit card that includes car insurance.
- In most cases, if you book your car rental with points, then your car rental insurance would apply assuming the points you use come from the credit card that offers credit card car insurance.
How you use the rental car may also affect your ability to make a claim. Most policies don’t allow you to use your rental car for commercial purposes, which includes moving your own stuff. Your policy would also be void if you get into an accident while under the influence of drugs or alcohol.
Best Credit Cards for Car Rental Insurance
Though many credit cards’ car rental insurance policies have overlapping features, there are some distinctions from card to card that are worth noting.
Best Credit Card for Maximum Payout
The American Express Gold Rewards card has a maximum payout of $85,000. Although this number is $20,000 more than the other cards we’ve listed, remember that you’re still only insured up to the actual current value of the car when it’s damaged. For example, let’s say your rental vehicle had a manufacturer’s suggested retail price of $80,000 but the car has a current value of $60,000, then your payout would be $60,000 if the car is a complete write-off. But the unused $25,000 of coverage could be applied toward the loss of use of the rental vehicle while it’s under repair and reasonable towing.
When comparing different credit cards that come with car rental insurance, you might be pushed in one direction or another depending on the other attractive features offered by the card. For instance, the American Express Gold Rewards card comes with 25,000 points ($250 value) as a sign-up bonus and earns 2 points per $1 spent at eligible gas stations, grocery stores and drugstores.
*American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply link.
Best Credit Card for Added Discounts
The Desjardins Odyssey World Elite Mastercard overlaps with some other credit cards in terms of its car rental insurance, but we’re highlighting it because aside from providing car rental insurance it also gives 20% off at participating Hertz car rental locations. As for the included travel medical insurance, cardholders are insured for 31 days if they’re under the age of 65 and for 15 days if they’re between the ages of 65-74. And the annual fee of $120 is waived for cardholders that are already a Desjardins client (i.e. they have a bank account with Desjardins).
Best Credit Card for Covering Personal Items
The BMO World Elite Mastercard is one of the few credit cards that includes a car rental personal effects benefit as part of its car rental insurance policy. What this means is that any personal property stolen in your car rental is covered up to $1,000 per person with a maximum of $2,000 per vehicle.
The card also provides car rental accidental death and dismemberment benefits. Obviously it’s a claim that you’ll hopefully never have to make, but the card entitles you (or your beneficiary) to lump sum payouts depending on your loss as a result of an accidental bodily injury while occupying an eligible rental car. For example, you’d be paid $50,000 if you lose a thumb or $200,000 if you suffer a loss of life.
Best Premium Automotive Benefits Credit Card
– Credit score required: Good-Excellent
– Min personal income required: N/A
– Annual fees: $699
A premium rewards card with a premium price tag of $699, the Amex Platinum Card comes with many benefits that cardholders enjoy when driving or parking. It’s Car Rental Theft and Damage Insurance can cover you for theft, loss and damage of your rental car with an MSRP of up to $85,000 for rentals of 48 days or less when you fully charge your rental to your Amex Platinum Card. To take advantage of this protection, simply decline the Collision Damage Waiver (CDW), Loss Damage Waiver (LDW) or similar option offered by the car rental agency*. When driving into or parking at Toronto’s Pearson Airport, cardholders will appreciate complimentary valet service at Express and Daily Parking, plus 15% off there as well.
Other exclusive benefits of the Platinum Amex are its $200 annual travel credit, status at global hotel brands, 50,000-point introductory bonus, unlimited and free access to 1200+ worldwide airport lounges, and an extensive suite of travel insurance.
*For full details, current product information and Terms and Conditions, click the Apply now link. Conditions apply.
Best No Annual Fee Credit Card
If you’re looking for a credit card that includes car rental insurance and has no annual fee, then you should consider the Rogers World Elite Mastercard. Unlike the other cards mentioned in this article, it only covers up to 31 days of travel. But it does cover up to $65,000 in damages, which is comparable to many other car rental insurance policies tied to an annual fee. The Rogers World Elite also has the added benefit of being one of the few credit cards in Canada that waives or makes up for foreign transaction fees. Those are some great features for a card with no annual fee.
*This post was not sponsored. The views and opinions expressed in this review are purely my own.