There are several ways to save money when you need rental car insurance, but using a credit card that includes this coverage is one of the best and most valuable options.
Before deciding to pay out of pocket, use your credit card coverage, or any other approach, it's important to understand the finer details of the various types of rental car insurance. Knowing what types of coverage protect you in what types of situations can provide much-needed peace of mind – and help you know where you can save.
This article explains the ins and outs of rental car insurance and explores the best credit cards that include coverage, so you can make an informed decision and hit the road with all the protection you need.
Key Takeaways
- There are a few types of rental car insurance that together, provide coverage for the vehicle and pay for medical bills if people are injured in an accident.
- Your personal auto insurance policy or credit card might include rental car insurance, but read your policies carefully to see if you have enough coverage.
- To make use of credit card rental car insurance, you must charge the full cost of the rental to your card.
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What is rental car insurance?
Rental car insurance provides coverage when you're driving a rental car. It may be included in your personal auto insurance policy, be part of your credit card insurance package, or be available with your travel insurance.
If necessary, you can purchase this insurance through the car rental company – though it's typically more expensive this way.
Purchasing rental car insurance from the rental company isn't mandatory as long as you have some other form of car insurance that meets the legal requirements in the province.
Types of rental car insurance
If you decide to purchase insurance at the rental car counter, you'll be presented with several kinds of coverage.
We've created this table to offer an organized view of the finer details of rental car insurance.
Note that of these, only third-party liability coverage is legally required (most provinces require at least $200,000 in coverage), so it should be included in your personal auto insurance. Check your policy to see your third-party liability coverage limits – experts recommend $2 million.
| Type of coverage | What it covers | What it doesn't cover | Approximate cost | Best alternative |
|---|---|---|---|---|
| Third-party liability coverage | * Damage and injury to other people/vehicles | * Your own medical injuries | Up to $10 per day | Personal auto insurance |
| Collision (CDW) and loss damage waiver (LDW) | * Damage to the vehicle caused by accidents, natural disasters, vandalism, and theft * Lost revenue for the rental company | * Other people's property damage * Medical bills * Loss, damage, or theft due to reckless behaviours or negligence * Might exclude parts of the car | Up to $60 per day | Credit card insurance |
| Personal accident insurance (PAI) | * Medical costs for you and passengers * Might include accidental death and dismemberment coverage | * Property damage | Up to $10 per day | Credit card insurance |
| Personal effects coverage (PEC) | * Lost, damaged, or stolen personal property | * Medical coverage | Often bundled with PAI, but can be less than $5 a day | Credit card insurance |
Pro Tip: If you're unsure whether you have adequate coverage, some rental car companies offer supplemental liability insurance for a reasonable fee.
How much does car rental insurance cost?
As you may expect, what you're charged for insurance depends on where you are, your personal demographics, and what kind of vehicle you're renting. Prices will be lower for budget cars and higher for luxury rentals.
We looked at car rental prices at the Toronto, Halifax, and Calgary airports, and compared both compact cars and intermediate SUVs in Toronto. The following prices are per day for a driver who is 25+ and in addition to the base rental cost.
Here's what we discovered:
| Rental company | CDW – Toronto (Compact) | CDW – Toronto (SUV) | CDW – Halifax (SUV) | CDW – Calgary (SUV) | Personal accident insurance (PAI) | Personal effects coverage (PEC) |
|---|---|---|---|---|---|---|
| Advantage | $19.99 – $29.99 | $19.99 – $29.99 | N/A | N/A | N/A | N/A |
| Alamo | $36.99 | $36.99 | $38.99 | $37.99 | $6.99 | Bundled w/ PAI |
| Avis | $31.00 | $35.00 | $35.00 | $35.00 | $5.95 | $3.95 |
| Budget | $31.00 | $35.00 | $35.00 | $35.95 | $9.90 | $4.00 (sometimes bundled w/ PAI) |
| Dollar | $39.54 | $61.14 | $39.89 | $36.74 | $8.35 – $9.06 | Bundled w/ PAI |
| Enterprise | $30.00 – $54.00 | $30.00 – $54.00 | $30.00 – $54.00 | $30.00 – $54.00 | $6.99 | Bundled |
| Hertz | $34.99 | $34.99 | $34.99 | $34.99 | N/A | N/A |
| Iversta | $21.99 – $31.99 | $28.99 – $38.99 | N/A | N/A | N/A | N/A |
| National | $31.99 | $36.99 | $38.99 | $37.99 | $6.99 | Bundled |
| Payless | $31.00 | $34.00 | $35.00 | N/A | $9.00 | N/A |
| Routes | $28.58 | Windshield only $19.48 | N/A | $36.44 | N/A | N/A |
| Thrifty | $34.99 | $34.99 | $34.99 | $34.99 | N/A | Bundled |
| Zoom | $24.99 – $34.99 | $24.99 – $34.99 | N/A | $24.99 – $29.99 | N/A | N/A |
Your personal car insurance policy may cover a rental car
Your personal auto insurance may include some level of coverage for a rental vehicle. For example, you may have third-party liability coverage and limits for accident benefits (often tied to the limits for your personal car insurance).
If you want to use your personal car insurance for a rental car, read your policy to be sure you'll be covered, or call your insurance provider to ask.
Your credit card might offer rental car insurance
Rental car insurance offered by your credit card might only be partial coverage. In that case, something is better than nothing, and you can pay the difference for additional coverage when you pick up your vehicle.
Have a look at the documents your credit card issuer sent you when you signed up for your credit card. If you can't find the booklet with the certificate of insurance, you can search for it online.
Here are the credit cards with the best rental car coverage:
| Category | Credit card | Collision Damage Waiver (maximum) | Personal Accident Insurance | Personal Effects Insurance | Total types of insurance coverage | Annual fee | Learn more |
|---|---|---|---|---|---|---|---|
| Best for cash back | Neo World Elite Mastercard - Gas & Grocery | $65,000 | $100,000 | $1,000 | 12 | $149 | Learn more |
| Best for flexible rewards | MBNA Rewards World Elite Mastercard | $65,000 | $200,000 | $1,000 | 12 | $120 | Learn more |
| Best for no fee | MBNA Smart Cash Platinum Plus Mastercard | $65,000 | $200,000 | $1,000 | 7 | $0 | Learn more |
| Best for roadside assistance | BMO CashBack World Elite Mastercard | $65,000 | N/A | $750 | 11 | $139 | Learn more |
Best cash back credit card: Neo World Elite Mastercard - Gas & Grocery
With an average earn rate of 5% back from partner retailers, the Neo World Elite Mastercard - Gas & Grocery offers excellent cash back opportunities – and it happens to also include rental car insurance. You'll also get at least 3% back on gas and EV charging, which can help even further with your rental vehicle costs.
There's also a secured version of this card available, so you can still take advantage of the excellent insurance and cash back opportunities, even as you're trying to build and protect your credit score.
Neo World Elite® Mastercard - Gas & Grocery
| Extended Warranty | 1 year |
| Purchase Protection | 90 days |
| Emergency Medical Term | 14 days |
| Emergency Medical Maximum Coverage | $1,000,000 |
| Trip Cancellation | $1,000 |
| Trip Interruption | $1,000 |
| Flight Delay | $500 |
| Baggage Delay | $1,000 |
| Lost or Stolen Baggage | $1,000 |
| Hotel Burglary | $1,000 |
| Rental Car Theft & Damage | Yes |
| Rental Car Accident | $100,000 |
| Rental Car Personal Effects | $1,000 |
Please review your insurance certificate for details, exclusions and limitations of your coverage.
Pros:
- Earn up to 5% cash back
- Redeem cash back at any time
- Extensive insurance package
- Secured version available
Cons:
- Caps on earning categories
Best flexible rewards credit card: MBNA Rewards World Elite Mastercard
×7 Award winner 
$40 GeniusCash + Up to 30,000 bonus points + birthday bonus worth up to 15k points.*
GC: $40
7x Award winner The MBNA Rewards World Elite Mastercard isn't just one of the best options for rental car insurance in Canada, it's the best Mastercard available in Canada. As such, it's not surprising that the insurance package includes a dozen different types, including rare price protection insurance:
MBNA Rewards World Elite® Mastercard®
| Extended Warranty | 1 year |
| Purchase Protection | 90 days |
| Price Protection | Yes |
| Mobile Device | $1,000 |
| Travel Accident | $1,000,000 |
| Trip Interruption | $2,000 |
| Flight Delay | $500 |
| Baggage Delay | $500 |
| Lost or Stolen Baggage | $500 |
| Rental Car Theft & Damage | Yes |
| Rental Car Accident | $200,000 |
| Rental Car Personal Effects | $1,000 |
Please review your insurance certificate for details, exclusions and limitations of your coverage.
You'll earn MBNA Rewards points with this card. This is one of the few programs with several high-value redemption options – gift cards, for example, are just as valuable as travel redemptions.
Pros:
- High 2.86% earn rate
- 10% birthday bonus points
- Very flexible rewards program
- Welcome bonus worth up to $300
Cons:
- High income requirements
Best no-fee credit card: MBNA Smart Cash Platinum Plus Mastercard
If you don't love the idea of paying an annual fee, the MBNA Smart Cash Platinum Plus Mastercard is a solid choice for a credit card with rental car coverage. It doesn't have a huge insurance package, but it does offer all 3 types of rental car insurance – and you'll earn up to 2% cash back, too.
This is a relatively easy card to get, too, since there are no income requirements. You can add a supplementary card for no extra fee, too, which gives you even more opportunities to earn that sweet cash back.
MBNA Smart Cash Platinum Plus® Mastercard®
| Extended Warranty | 1 year |
| Purchase Protection | 90 days |
| Travel Accident | $1,000,000 |
| Trip Interruption | $2,000 |
| Rental Car Theft & Damage | Yes |
| Rental Car Accident | $200,000 |
| Rental Car Personal Effects | $1,000 |
Please review your insurance certificate for details, exclusions and limitations of your coverage.
Pros:
- 5% cash back on gas and groceries for the first 6 months, up to $500 spent per month
- 2% cash back on gas and groceries
- No income requirements
- Supplemental card at no cost
Cons:
- Monthly spending caps
Best credit card with roadside assistance: BMO CashBack World Elite Mastercard
×1 Award winner GC: $150
1x Award winner The BMO CashBack World Elite Mastercard performs double duty by providing insurance coverage and free roadside assistance. This is a rare and valuable type of coverage that can come in very handy when cruising in your rental car.
In addition to the included rental car insurance, this card leverages partnerships with various car rental agencies. Depending on how and when you pay, you can get between 5% – 10% off the cost of a car rental at Avis, Budget, and/or National agencies.
BMO CashBack® World Elite®* Mastercard®*
| Extended Warranty | 1 year |
| Purchase Protection | 90 days |
| Travel Accident | $500,000 |
| Emergency Medical Term | 8 days |
| Emergency Medical Maximum Coverage | $5,000,000 |
| Trip Interruption | $2,000 |
| Flight Delay | $500 |
| Baggage Delay | $500 |
| Lost or Stolen Baggage | $500 |
| Personal Effects | $750 |
| Hotel Burglary | $1,000 |
| Rental Car Theft & Damage | Yes |
Please review your insurance certificate for details, exclusions and limitations of your coverage.
Pros:
- 12 types of insurance
- Free roadside assistance
- Discounts at Avis, Budget, and National car rental agencies
- Free 6-month Instacart+ membership
Cons:
- No Personal Accident Insurance
5 situations when you should purchase rental car insurance
You may still want to buy rental car insurance from the rental agency if your personal car insurance doesn't cover much, you're renting for a business trip, or you need a fairly long-term rental.
Here are the details on these and a few other reasons for not using your own insurance for a rental car:
1. You have minimal personal auto insurance
If you're driving an older vehicle that isn't worth much, you may not have full coverage on it – perhaps you only carry liability insurance. If you get into an accident in your rental car (which is a much newer, more valuable vehicle), your personal auto insurance policy probably won't be enough to cover the damage.
2. You don't want to file a personal auto insurance claim
In the off chance you get into an accident in a rental vehicle and file an insurance claim with your personal car insurance policy, you'll probably see your insurance rates go up at your next renewal. If you're concerned about this, don't use your personal insurance to cover your time in the rental car.
3. You're renting a vehicle for business
Some credit card or personal auto policies disqualify you from using your personal coverage for a business need. Instead, you'll want to speak with your employer about purchasing the required rental car insurance.
4. You're renting outside of Canada or the U.S.
Don't assume that your personal or credit card insurance extends to rental cars outside of North America. If you're travelling internationally, you might have to purchase rental car insurance from the vehicle provider.
5. You're renting for an extended period of time
Again, you'll want to review the details of your personal or credit card policy. Some policies only cover a set number of days; going beyond that will require you to purchase a separate insurance policy for the rental car.
FAQ
How much does rental car insurance cost?
If you're buying collision coverage from the rental car company itself, the price you pay really depends on the vehicle you're renting and the location. Generally, prices range from $20 to $70, so it pays to shop around.
What is the best way to get rental car insurance?
Ideally, you'll already have rental car insurance from your personal auto insurance. The next best way to get it is to pay for the rental car with a credit card that includes rental car insurance coverage. Your remaining option is to buy coverage directly from the rental car company, though this can be more expensive.
Do I really need insurance when renting a car?
If you've already got personal auto insurance with comprehensive and collision coverage that extends to rental cars, you likely don't need to buy additional rental car coverage. Rental coverage pays for damage to the vehicle that you may otherwise be responsible for.
Which credit cards offer rental car insurance?
There are several cards that offer this, but the Neo World Elite Mastercard - Gas & Grocery, MBNA Rewards World Elite Mastercard, MBNA Smart Cash Platinum Plus Mastercard, and BMO CashBack World Elite Mastercard are our top choices. These cards offer excellent coverage and other benefits, such as cash back on gas or even free roadside assistance.
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