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How does theft and damage insurance for credit card rental cars work?

To the point

While traveling, would you like to save tens of dollars in car rental insurance? The learn how to distinguish different credit card offers!

Theft and damage insurance for rental cars

The situation is common among travelers: 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 higher model
  • refueling on the way back
  • accessories (GPS, car seats…)
  • insurance

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

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national

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 normal that the insurances are more complete. If not, it’s time to change your travel card!

Definition of theft and damage insurance

Rental Car Theft and Damage Insurance offered by credit cards applies 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 REFUSE the 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!

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

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Notre voiture de location en 2007 à Monument Valley

Insured people

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

  • the 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 in full for the car rental with your credit card (except for certain cards such as the BMO® World Elite®* Mastercard®*)

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!

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Ford

What is 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 theprice of the vehicle sold new (between $65,000 and $80,000 depending on the credit cards).

Some credit cards go further, such as: the BMO® World Elite®* Mastercard®*, which will cover: personal effects up to $1,000 per insured person (maximum of $2,000) AND which will provide you with coverage Even if you only pay part of the rental cost with your card!

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Voiture de location à la Nouvelle Orléans

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.

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Notre voiture de location à Abu Dhabi

Vehicles not covered

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

  • Cars with a new value of more than $65,000 (American Express covers up to $80,000)
  • Exotic cars like Aston Martin, Ferrari, 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.

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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!

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!

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N'attendez pas pour faire votre réclamation

Credit cards milesopedia recommends

Not all credit cards are the same with regards to 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:

BMO® World Elite®* Mastercard®*

The BMO® World Elite®* Mastercard®* is one of the only credit cards to allow partial payment of the rental in order to be covered. It’s convenient for those who use points and miles!

In addition, it offers excellentrental car theft and damage insurance coverage – including personal effects – for rentals 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 whole or in partto the Account, or paid for with loyalty points accumulated under the Mastercard Rewards Program.

The Scotiabank Passport™ Visa Infinite* Card

The Scotiabank Passport™ Visa Infinite* Card was the first card from a major Canadian bank to charge no conversion fees for foreign currency transactions. So you can charge your car rental to this card and save the2.5% fee charged by most credit cards!

In addition, it offers 6 passes to Priority Pass airport lounges.

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 lease to your account; or ii) use
your Scotia Rewards to pay the total cost
or part of the rental on condition that, if only a
part of the cost of the lease is paid using
Scotia Rewards, the other part must be
charged to your account.

The National Bank's World Elite Mastercard®

The National Bank’s World Elite Mastercard® offers many very interesting travel and purchase insurances 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

The American Express Cobalt Card

The American Express Cobalt™ Card is one of the preferred credit cards in Canada.

Beyond its exceptional accumulation of points, it also has very good insurance, especially for car rental theft and damage, covering up to $85,000(compared to $65,000 for most credit cards) and for a period of 48 consecutive days!

In addition, unlike other cards, the American Express Cobalt™ Card requires no minimum income.

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 Membership Rewards points to pay for rentals and taxes are charged to the Card, the cardholder is covered.
However, if only a portion of the cost of the rental is paid with Membership Rewards points, the full 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.

The Scotiabank American Express Card

The Scotiabank American Express Card is one of the only cards in Canada, with no annual fee year after year, to offer car rental theft and damage insurance.

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 lease to your account; or ii) use
your Scotia Rewards to pay the total cost
or part of the rental on condition that, if only a
part of the cost of the lease is paid using
Scotia Rewards, the other part must be
charged to your account.

Conclusion

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!

In any case, remember to check the insurance booklet provided with your credit card BEFORE renting a car!

Best Credit Card Offers

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