Does Your Credit Card Cover All Your Car Rental Insurance Needs?

How the Best Credit Cards for Car Rental Insurance in Canada Work

Advertiser Disclosure This article/post contains references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.
Last updated on August 4, 2019 Views: 547 Comments: 27
Advertisement:

Amex_MemberGetMember

In this article

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$85,00048N/ARead More
Desjardins Odyssey World Elite Mastercard$130Up to actual cost of current value48N/ARead More
BMO World Elite Mastercard$150$65,00048Accidental Death & Dismemberment, personal effectsRead More
The Platinum Card from American Express$699$85,00048N/ARead More
Rogers World Elite Mastercard$0$65,00031N/ARead More

What You Need to Be Covered for When Renting a Car

Image source: Shutterstock

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

Image source: Shutterstock

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

American Express Gold Rewards CardThe 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.

Click here to learn more about the American Express Gold Rewards card

*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

Desjardins Odyssey World EliteThe 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).

Click here to learn more about the Desjardins Odyssey World Elite Mastercard

Best Credit Card for Covering Personal Items

BMO Rewards World Elite MastercardThe 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.

Click here to learn more about the BMO World Elite Mastercard

Best Premium Automotive Benefits Credit Card

The Platinum Card American ExpressThe Platinum Card from American Express

Eligibility Criteria:
– 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.

Click here to learn more on The Platinum Card from American Express

Best No Annual Fee Credit Card

Rogers World Elite MastercardIf 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.

Click here to learn more about the Rogers World Elite Mastercard

*This post was not sponsored. The views and opinions expressed in this review are purely my own.

Article comments

27 comments
Hugh says:

Thanks for all this great information. One thing that is bothering me. I am from Australia and wish to use the card to cover a rental in Winnipeg. All car companies that I contacted stated that they only take a preauthorisation and not full payment as stated in the cc requirements. Is a preauthorised amount sufficient to get the coverage if I had a Canadian card that included insurance

The GreedyRates Team says:

Hi Hugh,

Appreciate the comment. Usually the preauthorized amount will be enough to qualify you for coverage if you’ve got a card like the BMO World Elite Mastercard, for instance. According to the fine print in the BMO World Elite card’s insurance pamphlet, you’ll be covered if “the full or partial cost, including applicable taxes and/or fees of the Rental Car must be either charged
to the Account or paid through the redemption of loyalty points earned under the Mastercard reward program.” To us, it sounds like you’re in the clear.

Be sure to check the fine print for the card you forgot to specify in your comment, however. We can’t guarantee that each card listed in the above article is the same as BMO’s. Good luck and safe driving on your trip!

GreedyRates

Sasha says:

Hi Barry,

Great article.

Do you know any credit cards that will cover rental Van’s, trucks etc?

I need to rent a light duty van or truck several times a month and want to save insurance costs from the rental company.

What I mean by light duty:

GMC Savanna Van
Ford Transit
1/2 tonne to 1 tonne pick up

Thank you.

The GreedyRates Team says:

Hi Sasha,

Interesting question! We’ve never had anyone ask it before, and after a bit of research we’re prepared to answer. Unfortunately, you won’t like what you hear. Most credit card issuers explicitly exempt trucks and larger moving vehicles from coverage with their Collision and Damage Waiver. Personal auto insurance policies on Visa cards, for example, will extend to a regular car but not to vehicles above a certain weight or in a certain class.

Here’s a good example of how it’s handled on Scotiabank’s Gold Amex card, which is a card that offers some of the best insurance around. The types of vehicles that are covered are cars, SUVs, and mini-vans only. They even go further about mini-vans to exclude those with seating for more than 8, or those that used for hire by others. If that wasn’t clear enough, then you’ve got a list of excluded vehicles to drive the point home: vans (other than what was described above), trucks, pick-up trucks, off-road vehicles, trailers, mini-buses and buses, any vehicle with an MSRP above $65,000, or any vehicle that tows or propels (?) a trailer itself.

If you’re renting trucks for your work and want to insure them, you therefore should not rely on credit card insurance as a solution, because you won’t be covered. Best of luck!

GreedyRates

Kathy Nokes says:

Thank you so much for this informative article.
I have CapitalOne’s credit card (Costco one) which covers the rental vehicle I guess, not sure what but it covers something.

My question is around this statement: “Within Canada, you needn’t purchase additional liability insurance since it’s legally required to come with the car.”
What does it mean? Do I need to buy anything from the rental agency if my card covers something.

I always prefer to buy the Roadside assistance ($6-$7 per day) but apart from that do I need to buy any insurance (like $25+/day) that covers the other car (liability)?

Thanks in advance, really appreciate your help.

The GreedyRates Team says:

Hey Kathy,

We appreciate your comment and will help clear up this often-confusing car insurance situation. What the statement is saying, is that you do not need to purchase the extra liability insurance offered by the rental agency (Hertz, Budget etc.) when prompted. Almost universally, the employees at these rental agencies will pester you about it and strongly recommend their insurance, but this is a sales tactic. They have no idea what’s in your wallet but it’s highly likely that one or more of the average persons’ credit cards covers the exact same things, but as a rule they assume your credit cards offer absolutely nothing.

In your case, you’re covered by the Costco Cash Back Mastercard. Here’s what the card insurance entails: “Charge the full cost of your car rental to your Capital One credit card and decline the collision damage waiver insurance offered by the rental agency (you could save $20-$30 per day) and you’ll be insured if your rental car is damaged or stolen when you rent the car for a period of up to 31 days.” Roadside assistance is smart to buy always, but you can decline the rental insurance and drive confidently knowing that Capital One’s insurance provider has your back.

GreedyRates

Farhan Baig says:

your article is very informative, thanks for sharing your expertise. I want to ask the same question which somebody else asked, the answer was not clera for me.
Is the any card which, in the case a an accident, will cover both your rental car and the other car OR property you damaged. what I have learned that, the other car or property in case od accident is not covered, this part really confuses me as this will require you to involve your own insurance, which defeat the purpose of using credit card for car rental insurance. can you elaborate on this.
The other question I have, which Canadian card offers primary insurance in Canada and USA, as I have heard that most cards provide Secondary insurance, which means you will be forced to use your own insurance.
Thanks in advance

The GreedyRates Team says:

Hi Farhan,

Thanks for showing us your appreciation. We’re sorry if our guidance for the other reader wasn’t clear for you, and we’ll do our best to elaborate a bit further. If you’re asking about how the dual coverage for both the rental car and personal items works, via cards like the BMO World Elite Mastercard, then know that both coverages stack and are applied at the same time. If you’re in an accident the Collision Damage Waiver will protect against any damage to the car, with a few exceptions like if the rental is for more than 48 days, if it’s a truck or exotic car, or if its value is over $65,000. Your personal effects in the rental car are also covered, with exceptions including money, tickets, and perishable items.

To address your second concern about primary insurance versus secondary insurance, we believe you may be talking about the fact that you need to explicitly decline the rental car agency’s coverage to be eligible for your card’s insurance. This is normal and often recommended, as buying two insurances makes one of them a waste of money. You may also be referring to a mandate that some coverage is only “in excess of all other applicable valid insurance, indemnity or protection available to the Insured Person in respect of the item subject to the claim”. This means if you have existing insurance of any kind (perhaps its covered in your home insurance, or through the manufacturer), the card’s insurance is liable only for “the excess of the amount of the loss or damage over the amount covered under such other insurance”.
In either case, don’t worry about it. You aren’t paying anything extra for the collision damage coverage nor the rental car personal effects coverage, so even if they’re superseded by other insurance it’s no loss. Hope that helps explain, but if not feel free to get back to us. Thanks!
GreedyRates

Martin says:

Great information. I have two supplemental questions: 1) Does the credit card insurance cover you when you book a car using the rental car company points you have accumulated. I have Hertz points. 2) Is my spouse covered on the rental car coverage for driving the car if booked under my name ( I use SPG and TD Aeroplan cards). Many Thanks

The GreedyRates Team says:

Hey Martin,

Great questions. You’ll be automatically covered for the card’s collision and damage insurance if you use the card to pay for the rental in full, and unfortunately this excludes coverage for vehicles rented with rewards points. If you rent the car with rewards points, however, you’ll be able to pay for insurance from Hertz, which is still a cheaper option that paying in cash or credit for the rental itself. Regarding your second question, if you register your wife as a driver with Hertz when you do the rental (with the card), she’ll also be able to avail of collision and damage coverage. However, if she’s the driver during an accident and you didn’t list her as a driver with Hertz on the rental, you may not be covered.

GreedyRates

Dais says:

I am an Indian Citizen with an India license. Also have an American express credit card from US and expired US license. In Canada, Will I be eligible for the insurance from American express if I call and pay the additional rental car protection coverage

The GreedyRates Team says:

Hey Dais,

Thanks for the great question. If you’re worried about protecting your rental car and think you might lose coverage by holding a foreign license, we doubt that this means you’ll be ineligible for insurance protection. If you’re allowed to drive in Canada using an Indian or US license, then that should be proof enough you’re also able to get the same coverage as anyone else on the road. American Express makes it clear in the fine print that “where allowed by law, you will be automatically covered for damage or theft of your rental car”, so as long as you’re a legal driver you’ll be fine.

Keep in mind that you’ll need to decline the damage loss coverage or similar insurance offered by the rental agency in order to get Amex protection. You also need to fully charge the rental to your Amex card to get covered. If you have more specific questions about this matter then we’re sure an American Express representative will be able to assist you over the phone, so make a short list of pertinent questions to ask when you call to inquire. Good luck!

GreedyRates

Norm says:

I notice that the credit cards cover car rental insurance up to a maximum of 48 days. Does this mean that I can only rent one car per year and receive this benefit. Lets say I rent a car for 48 days. I return the car and then rent another car for another 48 days. Am I covered to the second contract?

The GreedyRates Team says:

Hey Norm,

Great question! If you rent a car and use your card which offers collision damage coverage for 48 days maximum, it means that coverage lasts for 48 consecutively per rental. On each car you rent, no matter how often, you’ll be covered for the same 48 days—there’s no reason to think of it in annual terms. For example, your first rental of the year which lasts for 12 days wouldn’t subtract these days from the next period of coverage, leaving 36. The 48-day coverage refreshes for the second contract, as you had guessed, which keeps your car or SUV protected regardless of how frequently you’re on the road. Pretty nice!

It’s also important to know the difference between what your card covers, what the insurance purchased from the rental company covers, and what your personal auto insurance covers. Not only can this help you avoid double-paying for insurance, it also helps you figure out who to call in the case of an accident. Remember to read into the fine print as well, because some credit cards require that you decline collision and damage insurance from the rental company, or risk negating the coverage provided by your card. Thanks again for the comment.

GreedyRates

Netta says:

Hi! Great article, thank you! What I found was that as I am already a BMO credit card holder, they told me that the World Elite $150 annual fee would not be waived, as it is for a welcome offer only. And if I ask for a credit card that is from a bank that I’m not already a customer with, they ask for 101 different documents… It feels like a Catch-22 situation. We’ll be travelling for 3 months, leaving in 2 weeks.

The GreedyRates Team says:

Hey Netta,

We’re glad you were able to get ahold of the excellent BMO World Elite card before your upcoming vacation! Now it can start earning rewards for you and helping in other ways as well, even without the annual fee waiver. It makes sense that the bank wouldn’t offer you the waiver, as their main goal is to use it to entice people to switch to BMO from other banks. If you’re already a customer, no dice. It also makes sense that another bank would ask you for more documentation than BMO, because they don’t have the same records that BMO has on you. This is the case when applying for any credit product or loan with a new bank. Either way, enjoy the card and have a safe and happy trip!

GreedyRates Staff

Sanket Patel says:

Thank for your helpful article! I am planning to get a new credit card with the auto car rental insurance. I am not sure, if any credit card provided any credit card with the both things, (i) Damage to rental car and another car coverage and (ii) injury to me and another card driver. I have heard that most of the credit cards provider’s auto rental insurance cover rental car damage only. can you please suggest me a good credit card with good auto rental insurance coverage benefits.

The GreedyRates Team says:

Hello Sanket,

Thank you for the excellent inquiry into car rental insurance via credit card. We know of many cards that have collision damage coverage, but none that offer coverage to the driver if they suffer minor injuries, like the ones you describe. It’s true that most cards offer the lowest-hanging fruit, but there is one card we know of that expands on the most basic benefits. BMO’s World Elite Mastercard may have a steep annual fee and require one to show a higher income, but it comes with the standard collision damage coverage alongside personal effects insurance, so that items stolen from your rental car are covered as well. Additionally, it’s one of the few cards to provide coverage for dismemberment and death occurring in a rental car—a rarity—although these are more serious injuries that we hope you won’t experience!

GreedyRates

Brad Williams says:

Very good article and most helpful. Personally I just get car rental insurance added yearly my own car insurance and it is not expensive at all and well worth it. This saves about 50% or more on your normal full car rental where you take the extra insurance from the rental agency. Next time you get a quote online do two quotes one with and one without the insurance and you’ll be shocked at the price difference.

The GreedyRates Team says:

Hey Brad!

Thanks very much for the kind words. We’re glad to have helped! It’s also great to hear your own personal advice for saving money on your rented vehicles. If you’ve found a way to boost your savings even more while still being protected—go for it! We always encourage readers to save as much as they can, with or without the cards we discuss here. However, keep in mind that some people might not have a car and therefore won’t have an existing insurance plan to add extra coverage to. Others might not rent cars as frequently, making blanket coverage that much more expensive. Regardless, everyone should take Brad’s advice! Check to see if your existing car insurance provider has rental car coverage and then consider it based on how often you plan to rent. Thanks again Brad!

GreedyRates Staff

Mike says:

What amount does the PCF world Elite include?

The GreedyRates Team says:

Hey Mike,

If you’re wondering about the amount of insurance for rental cars that’s provided by the PC Financial World Elite Mastercard, the exact number isn’t defined by PC. Usually issuers won’t give a specific coverage number as they would for emergency medical insurance or trip cancellation or interruption, but they will define exactly what is covered in the pamphlet sent to new applicants. You can refer to it for a better answer, or call PC themselves.

As far as our experience goes, we usually see collision damage waivers that only cover body work for a damaged rental car, which is obviously not the only thing that’ll need to be paid for should you get into a serious accident. Some cards also cover the roof and things like side mirrors, but it’s best to double check and find out. Either way, don’t expect the underwritten insurance provider to cover things like mechanical problems, tires, windows, or the car’s interior.

For a collision damage waiver purchased through the rental company, you’d expect to pay around $10-30 per day, so it’s nice to save this money and also limit how much they can charge for repairs (somewhat).

GreedyRates

Bogdan Zbyszewski says:

Is my rental car paid by Visa covered by insurance in Panama. This question ask at the Hertz rental counter in Panama Int. Airpot ( Tocument) ends up with the nasty discussion with the Hertz staff.
Avry time i am claiming that I should be covered by visa the question they shoot at me is: Do you have any document that you can proove it?

The GreedyRates Team says:

Hi Bogdan,

Thanks for the interesting request. The truth is, it’s going to be difficult to determine if and how your rental vehicles are covered until we can identify the Visa card you hold. Credit cards can cover a vast range of potential problems with the car, collisions and accidents, and the items and passengers inside—but not all equally. Regular car insurance for your own vehicle (if you have one) might also be relevant. However, many cards might also suffer from exceptions in the coverage contract, but we can’t give a precise answer until we get more information.

However, here’s a list of common things you normally need to do for your rental car coverage (via credit card) to kick in. First, you should decline the Hertz employees’ offer for their own coverage, ensure that you’re the primary renter and driver of the vehicle, and also pay for the rental in full using the Visa card you want coverage from. If you’ve satisfied all these criteria, and your Visa has standard CDW coverage (collision damage waiver) as many do, you’ll likely be able to ignore the Hertz salespeople anyway. They’re probably frustrated that they can’t get you to pay extra for insurance you may not need, and even more irked when you asked them to help you figure it out (unfortunately).

Best of luck on your travels.
GreedyRates

jim mckergan says:

rental company asked for written proof of insurance coverage is this normal and how do I get it

GreedyRates says:

Hi Jim, thanks for the interesting comment. Why would your car rental company ask for proof of outside insurance? Normally, if you elect not to cover the car with the insurance they sell, then they don’t ask questions and allow you to shoulder the liability instead. Regardless, if they’re insistent, we encourage you to call ahead and ask them if a printout of your card’s rental coverage policy is acceptable. If not, you’ll likely be able to get the official coverage waiver certificate via your credit card issuer. However, confirm first with the rental company if either of these options is acceptable. Thanks, and let us know how it turns out.

GreedyRates Staff

Ardo says:

Certain countries ask for letters from the credit card provider explicitly stating that you have CDW coverage. This happened to me in Costa Rica, and apparently, it is also the case in Australia.