Everything You Need to Know About Credit Card Rental Car Insurance

There are several reasons why you may need to rent a car in the not-so-distant future. Perhaps your employer asked you to travel to another province, and you need to drive to meetings. Or, possibly your vehicle needs to be repaired, leaving you without a ride for a few weeks. These are just a few simple examples.

If you've ever rented a vehicle in the past, you've likely been offered rental car insurance. Rental car companies offer this type of optional insurance; unfortunately, it is generally expensive and only provides a minimal amount of coverage. Because of this, many Canadian drivers feel uneasy about purchasing it.

Thankfully, there's another option — credit card rental car insurance. This raises several questions, such as "what is credit card rental vehicle insurance?" and "which credit card covers rental car insurance?".

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Rental car company insurance vs credit card insurance - what's the difference?

When you compare both rental car insurance options, you quickly realize that both are relatively similar. However, Canadian drivers must take the time to learn the differences between the two:

Insurance from a rental car company

When you buy insurance from a rental car company, you get two waivers: a collision damage waiver and a loss damage waiver (often shortened to CDW and LDW, respectfully). CDWs and LDWs cover vehicle damage and theft, much like standard auto insurance.

In some cases, rental car companies will charge an upfront fee, accompanied by a small daily rate. The exact price varies based on the company and vehicle.

Insurance from your credit card company

On the other hand, you can get the same level of coverage (and often more) from your credit card company.

Many credit card companies offer rental car insurance (among other bonuses) as an incentive. This is an invaluable tactic that credit card companies use to attract new customers.

This means that instead of buying separate coverage, your credit card company covers you automatically — just by paying with your card! Because of this, you can avoid wasting money on daily fees and other expenses that rental car companies hide in the fine print.

What does insurance provided by your credit card company cover?

As mentioned above, credit card rental vehicle insurance protects drivers from vehicle damage and theft.

But what types of damage precisely? Some common examples include:

• Physical damage to the rental car
• Theft or vandalism of the rental car
• Damage to personal or private property not related to the vehicle
• Injuries
• Loss of use of the rental vehicle while being repaired

For an in-depth list of what is and isn't covered, reach out to your credit card company.

Do all credit cards cover rental car insurance?

No, not all credit cards offer a rental car coverage incentive. Credit card companies tend to add this bonus to their more expensive products. However, if you're a loyal customer, your credit card company may offer you some perks.

You can review your contract if you have specific questions pertaining to your credit card. You can also reference your contract if you need to find information regarding changes to the following:

• Terms and conditions
• Penalties
• Pricing

Attributes to look for in a credit card

Unfortunately, we can't tell you exactly which credit cards with rental car insurance are the best choices for Canadians; there are too many options to choose from, and everyone has different needs.

However, we give you a list of beneficial attributes that you should keep an eye out for during your search. Knowing these attributes and why they're beneficial can turn a tough decision into a simple choice.

Personal effects benefits

Have you ever heard of personal effects benefits? It's a type of rental car coverage offered by select credit card companies.

If your personal belongings get damaged or are stolen from the rental vehicle, your credit card company will cover a portion of the loss.

For example, your credit card company may offer personal effects benefits of up to $1,000 per person or $4,000 per vehicle. 

Having personal effects coverage allows you to travel with your expensive personal belongings without worrying about them being stolen or damaged.

However, this is just an example; reach out to your credit card company to confirm what type of personal effects coverage they offer.

Accidental death and dismemberment coverage

Although we hope you never have to use it, it's always beneficial to have accidental death and dismemberment cover while renting a vehicle.

As the name implies, this type of rental car insurance covers unforeseeable deaths and injuries that lead to bodily dismemberment. 

Little or no annual income requirement

Some credit card companies require their customers to have a minimum level of income to purchase select products.

For instance, many high-end credit cards require users to have a minimum income of $100,000. Before you spend time researching a specific card, make sure that you double-check if you meet the income requirements. Doing this can save you time and energy in the long run.

If you're in an entry-level position and want credit card rental vehicle insurance, look for a product with little to no income requirements. Although these cards may not offer as many benefits, you'll still be able to take advantage of the savings.

Third-party discounts and privileges

Some credit card companies offer unique third-party discounts and privileges to their customers.

For instance, some Canadian credit card companies offer bonuses like complimentary valet services to customers parking at or driving into a major airport. Small perks like this are the cherry on top of the rental car experience.

What will you do next time you need to rent a car?

Now that we've taken the time to learn more about the benefits of having a car rental insurance credit card Canada and its drivers can save a bundle the next time they need to rent a vehicle.

If you still have questions about credit card auto insurance and can't find the answer in your contract, your credit card company will be happy to be of service.