Using a credit card to cover rental car insurance

Published: September 28, 2015

Updated: May 15, 2018

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While rental car companies offer their own insurance coverage packaged into the vehicle rental cost you should avoid it in almost all circumstances. There are exceptions of course, but it is important to know that you do not have to opt for this coverage and have numerous alternatives. We have discussed those options in previous guides, but perhaps the one that gets the most questions is using a credit card to cover you when renting a vehicle.

Whether renting in Canada or abroad, there are situations where your credit card provider will give you auto insurance when renting a vehicle. In many cases you will find that you are covered by your card company, but to make a claim you need to know that the bank provides this service. Of course, you should do this before you go on your trip or renting a vehicle, and a simple call to your credit company should give you all the necessary details.

Not all credit card companies provide insurance coverage for rental vehicles, but many do across the major carrier providers like VISA and MasterCard. Many credit cards from numerous account types across Canada’s major banks offer this kind of service, but again you should contact your card company to find out.

Even if your credit card company does provide auto insurance for rental cars you will still need to make sure you pay for the vehicle with your credit card. You also have to opt not to use the coverage provided by the rental company, if you do choose this tacked on coverage it will supersede any coverage you have on your credit card.

“When you pay for the entire cost of the rental vehicle using your credit card, you are covered for damage to the rented vehicle or theft up to the actual cash value of the damaged or stolen rental vehicle and valid towing charges,” RBC corporate communications adviser Lena Wan said in an e-mail. “The credit card insurer may not pay for any third-party liability expense, which means if you injure someone else or damage their property with the rental vehicle, it is not covered.”

There are some exceptions even if your credit card does cover you when renting a car. For example some nations do not offer this, so if you are travelling outside of Canada you will need to find out which countries your credit card covers you in. It is also worth mentioning that if you want to rent something exotic, like a Ferrari, your card will almost certainly not cover you and this also applies to a commercial vehicle like a truck.