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Have you ever rented a car and they’ve asked you if you need insurance? If you’re not prepared, you might say yes, but that would be a waste of money as you’re likely already covered by your own auto insurance or by credit card rental car insurance.

Even if you say no, the car rental company may make you second guess yourself as they may say are you sure? They’ll tell you how good their policies are and how it’s a pretty inexpensive product that gives you peace of mind. You might be tempted to say yes now, but why would you pay for something you don’t need?

These days, free rental car insurance is becoming a standard benefit with some of the best credit cards with no annual fee in Canada. Even though the insurance is free, not everything is covered which is why you need to understand how credit card rental car insurance works

The best credit cards with free rental car insurance in Canada

Credit cardDays coveredMRSP coveredAnnual fee
American Express Platinum Card48$85,000$699
Tangerine World Mastercard31$65,000$0
Home Trust Preferred Visa48$65,000$0

American Express Platinum

  • $699 annual fee
  • 25,000 Membership Rewards points sign up bonus
  • Earn 3 points per $1 spent on dining
  • Earn 2 points per $1 spent on travel
  • Earn 1 point per $1 spent on all other purchases.
  • $200 Annual travel credit
  • Unlimited airport lounge access
  • Special benefits at Toronto Pearson International Airport
  • Hotel status upgrades
  • Fine Hotels & Resorts benefits
  • Exclusive dining experiences with the Global Dining Collection
  • Comprehensive travel insurance package
  • Buyer’s assurance
  • Purchase protection

I’ve included the American Express Platinum Canada Card on this list since it’s one of the best travel credit cards in Canada. Not only that, but the American Express car rental insurance is excellent since it covers you for up to 48 days of consecutive travel with an MRSP of $85,000. This is on the higher end of the credit card rental car insurance so if you hold this card, know that you’re covered.

If you’ve been hesitant to apply for the American Express Platinum Canada Card due to the high annual fee of $699, I can tell you the card is worth it since you get a sign up bonus.

What many people don’t realize is that American Express Membership Rewards is one of the best travel rewards programs. You can convert your points to Aeroplan at a 1:1 ratio or 1:1.2 if you want Marriott Bonvoy points. Once those points are converted, you could easily get some high value redemptions. If that wasn’t enough, you also get a yearly travel credit of $200, unlimited lounge access, hotel status upgrades and more.

BMO World Elite Mastercard

  • $150 Annual fee – Fee waived in the first year
  • Get up to 40,000 BMO Rewards points as a welcome bonus ($285 value)
  • Earn 3 BMO Rewards points per $1 spent on dining, entertainment, and travel purchases
  • Earn 2 BMO Rewards points per $1 spent on all other purchases
  • Mastercard Airport Experiences membership provided by LoungeKey, plus 4 annual complimentary passes
  • Comprehensive travel insurance package included
  • Free global WiFi

What makes the BMO World Elite Mastercard a good choice as a credit card with car rental insurance is that it’s a premium that has no annual fee for the first year. Normally, you’d pay $150 for the yearly fee, but it’s waived for the first year. On top of that, the welcome bonus of 30,000 BMO Rewards points is worth $215. The included rental car insurance covers you for 48 days as long as the MRSP of the rental car does not exceed $65,000.

What’s also nice about this card is that you get a Mastercard Airport Experiences membership provided by LoungeKey, plus 4 annual free passes. Think about all those benefits for a second. You can basically use the welcome bonus to offset your car rental costs, you get car rental insurance and you get airport lounge access. All of this is free for the first year.

Scotiabank Passport Visa Infinite Card

  • $139 annual fee
  • No foreign transaction fees
  • 20,000 Scotia Rewards points when you spend $1,000 in the first 3 months
  • Priority Pass Standard Membership + 6 free visits per year
  • Earn 2 Scotia Rewards points per $1 spent on eligible grocery, dining, entertainment, and transit purchases
  • Earn 1 Scotia Rewards point per $1 spent on all other purchases
  • Annual bonus of 10,000 points ($100 value) if you spend a minimum of $40K per year
  • Included travel emergency medical, delayed and lost baggage, and trip cancellation / trip interruption insurance
  • Rental car collision / Loss damage insurance included
  • Hotel / Motel Burglary insurance included

The Scotiabank Passport Visa Infinite Card is very similar to the BMO World Elite Mastercard as they both give you rental car collision/loss damage insurance for 48 days at maximum MSRP of $65,000. What makes the two cards different are the additional benefits that the Scotiabank card gives you. You’ll get six free annual lounge passes and the card has no foreign transaction fees. Those extra perks are great, but Scotiabank Passport Visa Infinite Card’s annual fee of $139 is not waived for the first year.

It’s also worth mentioning that Scotia Rewards is slightly better than BMO Rewards. With Scotia Rewards, you can redeem your points for any type of travel including things you find that aren’t on the Scotiabank travel portal. That means if you find a cheaper car rental on Expedia or directly with the rental car agency, you can charge the purchase to your Scotiabank card and then redeem points later at full value. This flexibility can be quite handy.

Tangerine World Mastercard

  • No annual fee
  • 2% cash back on up to 3 categories
  • 0.5% cash back on all other purchases
  • Rental car collision/loss damage insurance – 31 days
  • Mobile device insurance up to $1,000
  • Mastercard Airport Experiences Provided by LoungeKey
  • Purchase assurance and extended warranty

The Tangerine World Mastercard is an upgraded version of the popular Tangerine Money-Back credit card. This higher tier card may earn you save amount in cash back, but it now includes free credit card rental car insurance. Your policy covers you for 31 consecutive days of travel and the car rental’s MRSP can’t exceed $65,000. That’s pretty awesome for a credit card with no annual fee.

The earn rate is great at 2% on up to three categories of your choice. You can two categories right away and a third one if you set up your cash back to automatically deposit into your account. All other purchases earn you 0.5% cash back.

You also get mobile device insurance (let’s hope you never need to use it) and Mastercard Airport Experiences Provided by LoungeKey. Although LoungeKey gives you access to many airport lounges, you still need to pay $32USD to enter each time.

Home Trust Preferred Visa

  • No annual fee
  • No foreign transaction fees
  • 1% cash back with no limits
  • Roadside assist membership
  • Visa Auto Rental Collision/Loss Damage Insurance
  • Purchase protection
  • Not available to residents of Quebec

Many of the best no foreign transaction fee credit cards in Canada include free rental car insurance, but the Home Trust Preferred Visa has no annual fee and a low personal income requirement for you to qualify.

The credit card rental car insurance covers you up to 48 days as long as the car rental’s MSRP doesn’t exceed $65,000. You also get a roadside assist membership which can be incredibly useful if you run into car issues, but note that it doesn’t apply to every country. Don’t forget, you must charge the entire cost of the car rental to your Home Trust Preferred Visa for your car rental insurance to be valid.

What credit card rental car insurance covers

I want to mention right away that your credit card rental car insurance only applies if you decline the auto insurance from the car rental company. That means if you decide to purchase insurance from the car rental company, your credit card car rental insurance is no longer valid.

As you can imagine, every credit card rental car insurance policy is different, but generally speaking, you’d be covered for the following:

  • Collision and damage
  • Loss/theft
  • Towing fees
  • Theft 

Unlike travel medical insurance, for your credit card rental car insurance to be valid, you must pay the entire balance of the car rental with your credit card. If you’re using points, you need to charge any outstanding amount to your card.

Depending on the policy, you’ll usually be covered between 31-48 days of consecutive travel and the maximum amount you can claim is based on the MRSP between $65,00 – $85,000

What credit card rental car insurance doesn’t cover

Every credit card rental car insurance policy is different and what you’re not covered is often buried in the fine print, but generally speaking, these are things you’re not covered for.

  • Liability insurance
  • Days that exceed the maximum days outlined in your policy
  • Vehicles that have an MRSP greater than what’s outlined in your policy
  • Exotic cars, motorcycles trucks
  • Vehicles that are used for commercial purposes
  • Accounts that’s aren’t in good standing
  • Inebriated driving or illegal activity
  • Some countries

This list of free credit card rental car insurance exclusions may seem long, but when you look at it, it makes a lot of sense. The only thing that throws people off is the lack of liability insurance (which you need in case someone sues you for pain and suffering). This may be concerning, but many car rental companies around the world are required by law to include liability insurance with any car rental. That said, the amount required may differ by country. For example, one country may only require $200,000 in liability insurance to be included but if you’re sued for $1,000,000 you might run into an issue.

The other exclusions are pretty understandable but I still want to highlight the fact that most cars beyond sedans, SUVs and minivans are typically not covered. You also can’t use your renal car for commercial purposes. That includes renting an SUV to move your personal possessions across the city. If you did that and got into an accident, your free credit card rental car insurance would not apply.

I don’t think I need to explain why inebriated driving or illegal activity would void your insurance but you should also know that your policy may also become void if you’re travelling to a country with a travel advisory.

Final thoughts

While have a credit card with rental insurance is important, not having included liability insurance is problematic. If you already have car rental insurance at home, check with your policy provider to see if you’re already covered (you probably are). If you don’t have car rental insurance at home, you could opt-in for liability insurance only when renting a car which would not affect your credit card car rental insurance.

The Best Credit Cards with Rental Car Insurance in Canada

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