What is Credit Card Rental Car insurance?

Whether you’re planning a road trip or are in need of a vehicle to cruise around a new country, car rentals allow you to get behind the wheel and explore almost anywhere.

That said, accidents happen, and especially when they happen to a car that doesn’t belong to you, you’ll want to make sure you have some type of protection in place for peace of mind.

What if we told you that this type of protection can come pre-loaded onto your credit card? That’s right! Certain credit cards in Canada offer car rental insurance as a part of their coverage plan. Credit card rental car insurance can come in many different forms, like car rental accident insurance, car rental damage and theft insurance, and car rental personal effects insurance. 

To learn all about the different types of insurance, how credit card rental car insurance works, and some of the best cards that offer rental car insurance, follow along with this comprehensive blog post.

The Different Types of Credit Card Rental Car Insurance

As stated, there are a couple of different types of rental car insurance you might see included on your eligible credit card, these might include:

Car Rental Accident Insurance

The first type of rental car insurance you'll want to familiarize yourself with is car rental accident insurance. Let's dive a little deeper into what this protection is and what it covers.

What is Car Rental Accident Insurance?

In the event of a rental car accident that results in severe injuries or death, credit card car accident insurance, also known as Accidental Death or Dismemberment (AD&D) insurance, offers financial reimbursement to help remedy the situation. Keep in mind, however, that this insurance type is often supplementary and may require claims be filed through your primary insurance provider.

This type of credit card coverage is important to claim, because without it, you'd have to pay for a corresponding waiver (like a Personal Accident Insurance waiver, or an Accidental Death or Dismemberment waiver) that would cost you a sum of money per day during your rental period. When the insurance is already included on your credit card, you don't have to pay for protection out of pocket because the protection is already in your pocket.

What Car Rental Accident Insurance Covers

Some credit cards that include car rental accident insurance will cover not only the cardholder, but also their spouse and dependent child if they are passengers in the rented vehicle at the time of the incident.

The following list includes losses that may be eligible for reimbursement under car rental accident insurance specifically:

• Loss of life
• Loss of sight (either entirely in both eyes or in one eye)
• Loss of speech
• Loss of hearing
• Loss of fingers on the same hand (specifically the thumb and index finger)
• Loss of hands and feet (either one of each or both)

Even if you experience multiple losses from an eligible accident, sometimes the credit card policy will only pay out the largest reimbursement amount available between the losses acquired.

If the cardholder loses their life because of the accident, then the beneficiaries will receive the proper compensation.

While this is a general idea of what car rental accident insurance covers, you'll want to double check your credit card's insurance certificate for specific terms and conditions as distinctions and pay-outs may vary.

What Car Rental Accident Insurance Doesn't Cover

There are a handful of exclusions and limitations to car rental accident insurance as well.

You likely won't be covered for your rental car accident if:

• You purposely drove the rented vehicle off the road
• You were intoxicated while driving the rented vehicle
• The accident was the result of intentional self-inflicted harm or intentional damage
• If the reason for the accident was the result of a symptom from any type of disease or illness
• If the incident occurred while you were committing a criminal act

Again, these conditions may vary and will be outlined comprehensively on each participating credit card's individual insurance certificate.

Car Rental Damage and Theft Insurance

Let's move on to car rental damage and theft insurance, which is more so focused on the protection of the actual rental car, rather than the passengers within it.

What is Car Rental Damage and Theft Insurance?

Car rental damage and theft insurance covers you when you need to repair or replace a rental car that was damaged or stolen while in your possession. Having this coverage included on your credit card saves you from having to pay for corresponding rental agency waivers like a Collision Damage Waiver (CDW) or a Loss Damage Waiver (LDW), which can cost you anywhere from $10-$30 a day. If your card comes with this insurance, you'll need to opt out of these waivers to activate your card's coverage. The protection fees would technically already be paid for by the annual fee of the eligible credit card.

What Car Rental Damage and Theft Insurance Covers

Your credit card's car rental damage and theft insurance will reimburse you up to a specified amount when your rental car is stolen or damaged.

Here's a better break down of the coverage:

• When stolen, your insurance will help cover costs associated with the loss of the rental vehicle
• When the rental car is damaged (whether due to occurrences like collisions or vandalism), the credit card's insurance policy will help cover repair costs
• Sometimes, certain credit card policies will even help to cover any fees charged by the rental company for the period of time that the rental car is out of service due to repairs

As always, check your credit card's insurance certificate for terms and conditions unique to your card's coverage.

What Car Rental Damage and Theft Insurance Doesn't Cover

Let's also take a quick look at the exclusions you may run into with your credit card's car rental damage and theft insurance:

• A replacement vehicle if your personal automobile insurance is already covering all or part of the cost of the rental car
• Any injury or damage to the cardholder, passengers, property or third parties (only the rental car itself is protected)
• Intoxication while operating the rental vehicle, leading to damage
• If the damage was inflicted while the rental was being driven by an unauthorized driver

Please refer to your credit card's insurance certificate for any specifics regarding your coverage.

Car Rental Personal Effects Insurance

Finally, we'll provide a bit more context on the rarer car rental personal effects insurance. This insurance is less about the rental car or its passengers, and more about the passengers' possessions present within the rental vehicle.

What is Car Rental Personal Effects Insurance?

As we briefly mentioned above, car rental personal effects insurance protects passenger belongings that were damaged inside or stolen from the rental vehicle. If you experience either of these cases, your credit card's insurance policy will reimburse you for your loss or damage up to a specified amount (typically depending on the card). The reimbursement amount limit might be larger if more than one eligible individual is making a claim and your card allows additional claims outside of the cardholder alone.

Like the other types of car rental insurance, you can purchase personal effects insurance through a corresponding waiver. That said, these waivers will cost you money each day of your car rental period.

What Car Rental Personal Effects Insurance Covers

To cover the loss or damage of your belongings, some credit cards may reimburse the least costly of the following:

• The replacement value of the possession (specifically its value at the time of the theft or damage)
• The amount needed to replace the possession with the same item or a similar model
• The repair costs associated with the possession (restored to the condition it held prior to the damage)

What Car Rental Personal Effects Insurance Doesn't Cover

As with all insurance types, there are some exclusions when it comes to personal effects coverage.

Here's a look at this policy's general limitations:

• Intentional damage to the possession or to the rental car resulting in the damage of the item
• If the personal belonging was confiscated by order of any government or customs regulation
• If the possession is contraband or part of an illegal trade
• Certain high-value items (including jewelry, cash, or antiques)
• If possessions where negligently left in plain sight in an unattended or unlocked vehicle

For stolen items, a police report is typically required to file a personal effects insurance claim.

No matter which type of coverage you see highlighted on your card’s insurance plan, always read your credit card's insurance certificate for the specifics revolving around what’s covered and excluded, any reimbursement caps, and how long your coverage lasts.

What Credit Card Rental Car Insurance Covers

Based on our previous discussions of each insurance type, you’ll likely find that your credit card rental car insurance generally covers the following depending on the policies outlined on your insurance certificate:

• Vehicle accidents (including collisions)
• Theft (either of the vehicle or personal belongings within the vehicle)
• Loss (of the rental vehicle itself or any loss incurred by the passengers, including injuries and death)
• Damage or vandalization (either of the vehicle or possessions within the vehicle)

As always, coverage will vary between cards, which is why it’s so important that you review your insurance certificate before renting an eligible vehicle.

For coverage, you’ll also need to make sure the rented vehicle has an MSRP (manufacturer’s suggested retail price) within the range of what your credit card covers, and that your rental period doesn’t exceed the coverage period provided by your card.

What Credit Card Rental Car Insurance Doesn’t Cover

On top of the distinct exclusions that come with different types of credit card rental car insurance, there are general limitations to rental car coverage.

Here are some examples of incidents you may need to seek additional coverage for:

• Third-party injury or damage
• Personal injury (and any associated medical bills)
• If the car rental period exceeds the eligible coverage period provided by your card
• If the rental car is a pickup truck, a van with 8 or more seats, a moving van, or another specialty vehicle
• If the MSRP exceeds what your card covers
• If the incident you're seeking coverage for was the result of a violation of the law or the coverage agreement (for example, driving under the influence or off-roading)
• If an incident takes place in the possession of an unauthorized driver

Ultimately, every credit card and insurance type offered by the credit card will have its own policies. For the most specified and updated terms and conditions regarding your credit card rental car insurance, always read your credit card's insurance certificate.

Primary vs Secondary Credit Card Rental Car Insurance Coverage

Credit cards can offer both primary and secondary insurance coverage, but secondary coverage is the most common. To check whether your card offers primary or secondary coverage, check your credit card’s insurance certificate.

Here’s a quick look at the distinction between these two different types of coverage.

Primary Coverage

If your card happens to offer primary coverage, then you can file a rental car insurance claim directly to your credit card company by calling the number on the back of your card.

Secondary Coverage

Secondary coverage applies after your personal car insurance policy. If your rental car was damaged, stolen or involved in an accident, you need to file a claim with your car insurance company prior to submitting a claim with your credit card company. Your personal insurer should pay the claim in this scenario, and the credit card issuer may handle other reimbursements not covered by the primary provider.

How Credit Card Rental Car Insurance Works

To use your credit card rental car insurance, you’ll want to follow these steps:

• Make sure your card is insured. To check whether your card covers rental car insurance, always check your credit card agreement and insurance certificate. To sift through credit cards equipped with car rental insurance, you can also make use of the insurance filters on our Best Credit Card Finder page.
• Familiarize yourself with your card’s car rental insurance terms and conditions. To do so, do more than simply skim your card’s insurance certificate. Actually take the time to sit down and read it. This way, you’ll know exactly what you’re covered for before any accidents occur.
• Pay for the rental car in full using an eligible credit card. To make sure you’re completely covered, you’ll need to rent an eligible vehicle using the credit card equipped with car rental insurance.
• Decline any waivers associated with the rental agency that conflict with your card’s insurance. These might include any collision, damage or loss waivers that will ultimately make your credit card rental insurance void. 
• Make a claim in a timely manner. If the unthinkable happens and you actually need to claim car rental coverage, make sure you report your claim promptly, typically within 24 to 48 hours. We’ll expand upon this point further in the next section.

How to file a Credit Card Rental Car Insurance Claim

To file a credit card rental car insurance claim, you’ll want to call your card issuer immediately if the card offers primary coverage. Otherwise, you'll need to contact your personal insurance provider. The appropriate number for your credit card issuer should be accessible through your card’s insurance certificate, or on the back of your physical card.

Your card’s support team will inform you of exactly which documents you’ll need to submit for a successful claim.

These documents might include:

• A copy of the accident report supplied by the rental company
• The rental agreement
• Any repair estimates
• Any related photographs of the incident
• A police report if one was provided
• Proof that you paid for the rental car using the appropriate credit card

Best Credit Cards With Rental Car Insurance

Some of the best credit cards with rental car insurance come from BMO because they offer all three types of coverage: car rental accident, car rental damage and theft, and car rental personal effects insurance. These top contenders include the

BMO Ascend World Elite Mastercard, a premium travel-oriented card that optimizes travel, dining, recurring bill, and entertainment purchases. There’s also the BMO Air Miles World Elite Mastercard, fit for Air Miles collectors looking to earn Miles points at participating Air Miles partners, plus grocery, liquor, and wholesale stores. Both these BMO cards offer up to $1,000 in car rental personal effects coverage, and $200,000 in car rental accident coverage on top of car rental damage and theft protection, all alongside comprehensive coverage in other categories, plus travel and entertainment perks.

Aside from BMO, you’ll also find this tripled car rental coverage on the Neo World Elite Mastercard. This is a unique credit card that boosts your cashback rates when you carry an eligible balance in a Neo Everyday account or purchase goods and services at participating Neo Partners. With this card, in addition to car rental damage and theft insurance, you’ll find that car rental personal effects have a coverage of up to $1,000, while car rental accidents specify a coverage cap of up to $100,000 for cardholders, plus a cap of $10,000 per spouse or dependent child. 

There are more credit cards from other popular institutions that offer common car rental damage and theft protection, like Canada’s best, the American Express Cobalt Card. This balanced card covers rentals with an MSRP of up to $85,000 for a period of 48 days or less when charged completely to the card. This rental car coverage pairs well with the Cobalt’s competitive points system on popular spending categories and its flexible redemption program.  

To explore more cards with either car rental accident, car rental damage and theft, and/or car rental personal effects insurance, don’t forget to check out our Best Credit Card Finder page, complete with car rental insurance filters.

Conclusion

Some credit cards come equipped with rental car insurance to protect you against incidents like damage, injury, and theft. This coverage can either act as primary or secondary insurance and is applicable to rentals that were paid for in full by the eligible card, and those that meet requirements like the capped MSRP or the covered timeframe outlined by the card’s insurance agreement.

As with most perks, your credit card’s rental car insurance isn’t one-size-fits-all. To understand exactly what’s covered and excluded from the insurance policy, you’ll need to review your credit card’s insurance certificate. This will prepare you for any unexpected event where you may need to make a claim.

Frequently Asked Questions

Is credit card rental car insurance worth it?

If you’re someone who frequently travels and may need to rent a car from time to time, it never hurts to have a little extra insurance protection in your back pocket. It’s especially worth it if you find a credit card that meets all your financial needs, plus comes with rental car insurance as an added perk. Please note, however, that sometimes your credit card rental car insurance won't cover every type of incident, so you may need to seek additional coverage outside of the card.