Insurance Insurance: How Does Credit Card Rental Insurance Work?

To the point While traveling, would you like to save tens of dollars in car rental insurance? Learn how to distinguish different credit card offers!

Definition of theft and damage insurance Insured people Covered by theft and damage insurance

Not covered by theft and damage insurance Situations not covered Vehicles not covered Countries not covered

Make a claim

Bottom line

The situation is common among travellers: being at the counter of a rental agency and not knowing whether or not you should take out the insurance offered to you.

Be aware that the counter agent receives a commission based on several factors:

paid upgrade to a premium car
refueling on the way back
accessories (GPS, car seats…)
Travel Insurance

Very often, the renter will play on your lack of knowledge and the natural fears people have when they are away from home.

As for the insurance provided by your credit card, remember that you always get value for the money you put into your card’s fee.

With a card with no annual fee from year to year, chances are that your insurance coverage, including car rental insurance, will be incomplete… or even non-existent.
If your card has an annual fee, it would be expected that the insurance coverages are more complete. If not, it’s time to change your travel card!

Car Rental Insurance - Definition of theft and damage insurance

Rental Car Theft and Damage Insurance offered by credit cards apply only to the vehicle rented by the credit card holder and covers the credit card holder against theft or damage to that vehicle only.

To benefit from this coverage, the credit card holder will have to DENY theft and damage insurance offered by the renter. This insurance is commonly known as Collision Damage Waiver (CDW) and can cost up to $40 per day!

We will talk about liability insurance for all damages to other vehicles, property or persons. This liability insurance is never included with credit cards.

P1010986 — Notre voiture de location en 2007 à Monument Valley

Car Rental Insurance - Insured people

The theft and damage insurance for rental cars offered by credit cards protects:

credit card holder
other people driving the vehicle with the holder’s authorization

If you are a couple and each have a credit card linked to the same account (main card and additional card), be sure to use the credit card of the person who will be registered on the rental agreement. For example, do not use Mrs.’s credit card if Mr. is the one on the rental agreement.

To be covered by your credit card’s theft and damage insurance, it is mandatory to have:

refused the insurance offered by the renter
paid the car rental in full with your credit card

As a general rule, pay in full for the car rental with your credit card OR use the credit card affiliated with the loyalty program from which you use the points.

This means using an AIR MILES credit card when you use AIR MILES or an Aeroplan credit card when you use Aeroplan Miles!

Car Rental Insurance - Covered by theft and damage insurance

The theft and damage insurance for rental cars offered by credit cards covers:

the cost of repairing a rented vehicle that has been accidented or vandalized
the loss of use of the vehicle by the car rental agency during the time of repair
the total cost of the vehicle in case of theft or total loss

All this will be within a limit corresponding to the price of the vehicle sold new (between $65,000 and $80,000, depending on the credit card).

Voiture de location à la Nouvelle Orléans

Car Rental Insurance - Not covered by theft and damage insurance

Situations not covered

Theft and damage insurance for rental cars offered by credit cards WILL NOT COVER:

Civil liability
Bodily injury or property damage (other than to the rented vehicle)
Loss or damage to devices used to enter the vehicle (keys, remote controls, etc.)
Damage intentionally caused to the rental car by the card holder
Driving of the car by the cardholder or an eligible person who is under the influence of intoxicating or narcotic substances obtained illegally or on prescription
Dishonest, fraudulent or criminal acts committed by any eligible person
Participation in a race or speed event
The use of fuel of a type or octane rating other than that recommended by the manufacturer
Normal wear and tear, gradual deterioration, breakage or mechanical or electrical failure
Use of the rental car in violation of the terms and conditions of the rental agreement
Transportation of contraband or illicit items
Civil or foreign war, hostile or warlike acts, insurrection, rebellion, revolution
Transporting goods or passengers for remuneration

While most of these non-covered situations are normal, make note of the lack of liability insurance. It will be your responsibility to check your coverage with your personal insurance OR to accept the renter’s liability insurance.

Vehicles not covered

Also, as a general rule, certain types of rental cars are excluded:

Cars with a new value of over $65,000 (American Express covers up to $85,000)
“Exotic” cars such as Aston Martin, Ferrari, and Porsche.
Commercial vans
Trucks and vans
Limousines
Off-road vehicles
Motorcycles, mopeds and motorbikes
Trailers, camper units, recreational vehicles
Minibuses or buses
Older cars (more than 20 years old) or cars that have not been manufactured for at least 10 years

As a general rule, only cars, minivans and SUVs are covered by credit card rental car theft and damage insurance.

Une Jaguar n'est pas couverte par les cartes de crédit

Countries not covered

Finally, some credit cards do not cover specific countries or even certain regions of a country.

In order to know if the country in which the rented vehicle will travel is covered, it is up to you to:

consult the booklet detaling the coverage provided with your card
or call the card issuer in case of doubt

Before leaving on a trip and renting a car, consult your credit card’s insurance booklet to find out about your coverage!

Car Rental Insurance - Make a claim

You had an accident? Your rental car was stolen?

You will need to contact your credit card insurance company as soon as possible to make a claim. Make sure you have all supporting documents on hand:

Rental agreement indicating that you have declined the insurance offered by the agency (CDW)
Police reports
Photos in case of damage
Repair cost estimates

Afterwards, your credit card insurance will take over from the car rental agency to settle the situation.

Get into the habit of taking a few pictures BEFORE you take possession of the vehicle: possible damages on the bodywork and a photo of the rental agreement (if you only have a paper version)!

If the vehicle is stolen with the agreement in the glove box, you will have a version of it your phone!

N'attendez pas pour faire votre réclamation

Car Rental Insurance - Recommended Credit Cards

Not all credit cards are the same for theft and damage insurance for rental cars.

As a general rule, credit cards offering theft and damage insurance for rental cars will differ in 4 aspects:

The coverages offered (theft and damage, towing costs, loss or theft of personal effects, accidental death or dismemberment…)
The amount covered (maximum amount of the vehicle, personal effects, or compensation for death or dismemberment)
The coverage period (up to 48 days for the best cards)
The rental conditions (total or partial amount on the card )

Here are 5 credit cards that we recommend for car rental theft or damage insurance, according to different income levels:

National Bank World Elite Mastercard

The National Bank’s World Elite Mastercard^® offers many exciting travel and purchase insurance coverages, which we have detailed here.

In terms of rental car theft and damage insurance, this card includes personal effects and covers rentals that can last up to 48 consecutive days:

Specificities	Details
Coverages offered
Theft or damage	up to $65,000
Personal belongings	up to $1,000 per insured ($2,000 per account)
Period of Coverage	up to 48 consecutive days
Rental conditions	Eligible vehicle rentals made by the cardholder and paid for in full with the card or using tje reward points

Scotiabank Passport™ Visa Infinite* Card

The Scotiabank Passport™ Visa Infinite* Card was the first card from a major Canadian bank, Scotiabank, to not charge conversion fees for foreign currency transactions. So you can charge your car rental to this card and save 2.5% in fees charged by most credit cards!

What’s more, it offers 6 VIP airport lounges and allows you to earn Scene+ points.

Specificities	Details
Coverages offered
Theft or damage	up to $65,000
Period of Coverage	up to 48 consecutive days
Rental conditions	You lease the vehicle in your name; and i) charge the total cost of the rental to your account; or ii) use your Scene+ Points to pay for all or part of the rental, provided that if only part of the rental cost is paid with Scène+ Points, the other part is charged to your account.

BMO Ascend World Elite Mastercard

The BMO Ascend World Elite Mastercard offers excellent car rental theft and damage insurance coverage – including personal effects – for rental periods of up to 48 consecutive days and is the only card to offer coverage in the event of death or dismemberment:

Specificities	Details
Coverages offered
Theft or damage	up to $65,000
Personal belongings	up to $1,000 per insured ($2,000 per account)
Accidental Death or Dismemberment	up to $300,000
Period of Coverage	up to 48 consecutive days
Rental conditions	Rental fees (…) must have been charged in full to the Account or have been paid using loyalty points earned under the Mastercard rewards program.

American Express Cobalt^® Card

The American Express Cobalt^® Card is one of Canada’s preferred credit cards.

In addition to its exceptional earning of points, it also has excellent insurance, notably for theft and damage to rental cars, covering up to $85,000 (compared with $65,000 for most credit cards) and for 48 consecutive days!

What’s more, unlike other cards, the American Express Cobalt^® Card requires no minimum income. This is an American Express Membership Rewards credit card.

Specificities	Details
Coverages offered
Theft or damage	up to $85,000
Period of Coverage	up to 48 consecutive days
Rental conditions	The total cost of the rental (…) must be charged to the eligible card (…). If the Cardholder uses points in the Membership Rewards program However, if only a portion of the rental is paid for using Membership Rewards points, the entire balance of the rental, including taxes, must be charged to the Card to be covered.Note: Car rentals will not be covered against theft and damage if paid for with points from a reward program other than Membership Rewards Points.

Scotiabank American Express^® Card

The Scotiabank American Express^® Card is one of the only credit cards in Canada to offer car rental theft and damage insurance, with no annual fee, year after year. This is a Scene+ credit card.

It’s an excellent card for those who are new to travel hacking and want to benefit from this type of insurance without paying an annual fee!

Specificities	Details
Coverages offered
Theft or damage	up to $65,000
Period of Coverage	up to 48 consecutive days
Rental conditions	You lease the vehicle in your name; and i) charge the total cost of the rental to your account; or ii) use your Scene+ Points to pay for all or part of the rental, provided that if only part of the rental cost is paid with Scène+ Points, the other part is charged to your account.

Bottom line

By choosing the right credit card, you could avoid unnecessarily paying dozens of dollars in car rental theft or damage insurance! As you’ve seen, there’s no shortage of choices!

Remember to check the insurance booklet provided with your credit card BEFORE renting a car!

Credit cards insurance