Credit card rental insurance can be very valuable, especially for those who use rentals often. You won't need to pay for the rental agency's own insurance, but you still have peace of mind knowing the costs of any accidents will be covered.
This article explains the finer details of how your credit card's rental car insurance works, including questions to ask and details to look into before renting a vehicle. It also lists the top Canadian cards that offer this type of insurance.
Key Takeaways
- To use your credit card’s rental car insurance, you usually have to charge the entire cost of the rental to your credit card.
- Drivers must decline the rental company’s collision and loss damage waivers in order for your credit card insurance to be valid.
- Credit card rental insurance varies in terms of what’s covered and coverage limits, so read your card’s insurance certificate carefully.
- The best cards with rental car insurance coverage are the MBNA Rewards World Elite Mastercard, Neo World Elite Mastercard - Gas & Grocery, and American Express Gold Rewards Card
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How credit card rental car insurance works
If your credit card comes with rental car insurance, it's easy to use – as long as you charge the full cost of the rental to the card. You'll also need to decline the coverage provided by the rental car company.
If you want to use your credit card's rental car insurance, there are a few important things to do:
- Check the vehicle's MSRP: When you select a rental car, make sure the vehicle's MSRP (manufacturer's suggested retail price) doesn't exceed what your card covers. You should also confirm that your coverage doesn't exclude any particular vehicle types. Getting a free upgrade to an EV or Cadillac seems great – but if the car's MSRP is higher than your coverage limit, you could be on the hook for costly repairs after an accident.
- Find out how long your coverage lasts: Most cards offer somewhere between 31 and 48 days of rental car insurance. If you need coverage beyond this, you'll need to purchase it.
- Abide by the law and car rental agreement: If something happens to the car and you're in violation of your agreement (or the law), your credit card won't cover you. Similarly, ensure that any additional drivers are listed on the rental contract – failing to do so could forfeit your coverage in the event of a claim.
Pro tip: Using rewards points to pay for your rental? Make sure the card you use is part of the same rewards program. For example, if you use your Aeroplan points to help pay for your rental, only an Aeroplan-branded card will provide rental car coverage.
Do all credit cards come with car rental insurance?
Before we get into the types of coverage available, it's important to note that rental car insurance isn't included with every credit card. You'll need to check your card's terms and conditions to see whether you have coverage and what's included.
Among credit cards that do offer rental car insurance, coverage limits vary. Check your policies before booking your rental car to ensure you're maximizing your benefits and minimizing your out-of-pocket expenses.
Primary vs. secondary car insurance coverage
The insurance policy you get will either provide primary or secondary coverage. The type of coverage determines how a covered claim is handled and paid out.
With a primary policy, the card issuer pays out first. If you have a secondary policy, you'll be expected to file a claim with your personal auto insurance company and pay your deductible first. Then, the credit card issuer will cover additional costs.
If your personal insurance policy isn't valid internationally, your secondary credit card coverage will essentially become primary during your international travels.
Collision damage waiver (CDW) vs. loss damage waiver (LDW)
CDWs and LDWs are among the most common types of rental car insurance offered by credit cards. While they sound the same, there are subtle differences:
- Collision damage waivers typically cover issues like vandalism, fire, and extreme weather. They can also cover damage to the rental car if you're involved in an accident. Having this coverage on your credit card allows you to decline the rental agency's waiver.
- Loss damage waivers typically cover the same types of damage as CDWs. But they also cover the rental car if it's stolen or can't be rented out because of damage.
You'll need to decline both of these coverages if you use your credit card's rental car insurance.
Questions to ask about your credit card rental car insurance
When you want to use any credit card rental car insurance you have but don't know where to begin, start by asking about and looking into the specific kind of insurance your card offers and whether there are any exclusions.
Here are useful questions you can use as starting points for asking your card issuer about insurance coverage:
- What insurance is included with my credit card? Although the terms and conditions document should be straightforward, a customer service agent can go over each type of coverage if you need clarification.
- Are there any exclusions to what's covered? You'll want to understand whether your coverage is (or isn't) valid in specific countries or for a specific period.
- Are any vehicles excluded from coverage? It doesn't hurt to find out if certain vehicles won't be covered through your card's insurance – especially if you rent unique, new, or specialized vehicles.
- Is the insurance coverage primary or secondary? You'll want to understand whether the credit card coverage is the first insurance to pay, or whether you'd need to go through your personal auto insurance policy first (if applicable).
- How do I file a claim? Ask the agent to walk you through the steps you would need to take to file a claim. Many providers allow you to submit a claim online, in person, or over the phone.
Pro tip: Before you set out for a trip, check your credit card's insurance certificate. It's not a bad idea to bring a copy of it on your travels to show the rental agency if they get pushy about selling you coverage.
Best cards for credit card rental car insurance
The best credit card for rental car insurance is the MBNA Rewards World Elite Mastercard, but there are some significant contenders. Take a look:
| Credit Card | Annual fee | Insurance Details | Welcome Bonus | Learn More |
|---|---|---|---|---|
| MBNA Rewards World Elite Mastercard | $120 | * 13 types * Includes rental car theft and damage coverage * Includes rental car accident coverage * Includes rental car personal effects coverage | Up to 30,000 bonus points (terms) | Learn more |
| Neo World Elite Mastercard - Gas & Grocery | $149 | * 12 types * Includes rental car theft and damage coverage * Includes rental car accident coverage * Includes rental car personal effects coverage |  $25 GeniusCash + $100 bonus cash back, first year free (terms) | Learn more |
| American Express Gold Rewards Card | $250 | * 11 types * Includes rental car theft and damage coverage | Up to 60,000 bonus points (terms) | Learn more |
1. Best overall: MBNA Rewards World Elite Mastercard
Insurance coverage: Rental car theft and damage, accident, and personal effects
Coverage amounts: $200,000 accident, $1,000 personal effects
Coverage period: Coverage begins when picking up the rental car until the rental period ends, you drop off the vehicle, or your coverage is terminated.
The MBNA Rewards World Elite Mastercard takes first place for best card with rental insurance. Although the income requirements are steep, you get a very generous insurance package with a dozen different types of coverage. You'll also earn MBNA Rewards points at a rate of up to 5 points for $1 spent, plus up to 30,000 bonus points and a 10% birthday bonus each year.
2. Runner-up: Neo World Elite Mastercard - Gas & Grocery
×3 Award winner 
GC: $25
3x Award winner Insurance coverage: Rental car theft and damage, accident, and personal effects
Coverage amounts: $100,000 accident, $1,000 personal effects
Coverage period: Coverage begins when picking up the rental car until the rental period ends, you drop off the vehicle, or your coverage is terminated.
The Neo World Elite Mastercard - Gas & Grocery is an all-around excellent cash back credit card as well as a solid travel card, thanks to its extensive insurance package – rental car coverage included. You can earn up to 5% cash back at Neo partners, with 1% to 5% back on your regular spending. There's no need to wait to redeem it, either. You can cash out whenever you like.
3. Best for high CDW coverage: American Express Gold Rewards Card
Insurance coverage: Theft, loss, and damage of the rental car
Coverage amount: $85,000
Coverage period: Coverage begins when picking up the rental car until the rental period ends, you drop off the vehicle, or your coverage is terminated.
The American Express Gold Rewards Card is one of Canada's top rewards credit cards, and its rental car insurance is another reason it stands out. While it has a fairly high $250 annual fee, you'll get an annual travel credit to help offset it. Plus, you'll enjoy a huge welcome bonus, a steady earn, and an impressive insurance package – its $85,000 coverage limit for rental car theft and damage really helps it stand out.
FAQ
Why do I need rental car insurance?
Although rental cars come with some level of third-party liability coverage, it's pretty limited. If the car is stolen or damaged, you're on the hook for paying the bill. This is an example of how valuable rental car insurance can be.
What credit card is best to use when renting a car?
To maximize rental car insurance coverage, the MBNA Rewards World Elite Mastercard is your best bet, as it comes with rental car theft and damage, accident, and personal effects coverage. But any card with a significant earn rate and rental car insurance is excellent for renting a car.
Does my credit card cover a car rental?
The best way to find out if your credit card has rental car insurance is to read the insurance certificate for your card. You can find this online by doing a quick search for your specific credit card. Pay attention to the coverage limit if you do have this insurance.
Does my CIBC Costco Mastercard have car rental insurance?
Unfortunately, the CIBC Costco Mastercard doesn't come with any rental car insurance – in fact, it doesn't have any type of travel insurance at all. This card only includes the standard 1-year extended warranty and 90 days purchase protection, along with $1,000 in mobile device coverage.
What's the best credit card for car rental insurance in Canada?
The MBNA Rewards World Elite Mastercard has the best rental car coverage of any credit card. You'll get up to $200,000 in accident coverage and $1,000 in personal property coverage with the card's rental car insurance. Just remember to charge the rental car cost to the card so coverage kicks in.
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