Whether you are on a holiday, need a set of wheels to get around
town, or renting a truck to move, you are always faced with the
question, "do I need rentalcar insurance"? Most Canadians
believe that their credit cards have automobile insurance included.
This is not always the case. Only certain credit cards have car
insurance coverage. Before renting any vehicle, if you intend to
use the insurance on your credit card, you must first
confirm that your credit card in fact has
Even if your credit card has auto rental insurance, you
are only covered for certain things. Generally you are
covered for damage to the vehicle, replacement if it is stolen and
towing. You are not covered for damage to the other person's
vehicle, injuries to its occupants, injuries to a pedestrian should
you strike one, or other third party damaged property. There are no
accident benefits for you or your car's occupants. In order to
get coverage for those things you must buy the rental company's
insurance, or have your own car insurance through your own personal
vehicle insurer. However, even with these coverages there can still
be various coverage gaps and exclusions.
In respect of the credit card insurance, it
generally covers only certain types of vehicles. You will not be
covered if you rent an upscale vehicle. Often this is expressed in
the policy as a maximum dollar value of coverage. Often trucks are
not covered at all. When on a holiday, you must be certain that
your credit card, and for that matter your own automobile insurer,
will cover you where you are traveling. Often coverage is only
provided in continental North America. Individuals often think that
Mexico, the Caribbean and Hawaii are included, when in fact they
are often excluded. You may not be covered if you leave the
province, state, or country where you rented the vehicle. If you
intend to travel for a lengthy period of time you should check that
the policy will cover you for the full duration of your trip. There
are often provisions that the insurance is limited to specified
More often than not, coverage does not extend if you let someone
else use the vehicle. It only applies if the card holder/the renter
is driving the vehicle. You are not covered if you are impaired.
There are often exclusions for driving off road, meaning not being
on a paved or designated roadway.
You are not covered under your credit card insurance
if you accept the rental car company's insurance. When
renting you need to leave a credit card on file. You need to use
the credit card that you reserved and paid for the rental vehicle
with, or the card you used to redeem points for the rental for the
credit card insurance to cover you. A large deducible often applies
to these credit card policies, which may vary from card to card. If
you have an accident, you will likely have to first pay for the
damage on your credit card and be reimbursed after the fact.
There are many exclusion and exceptions when
using credit card automobile insurance. All of the details are in
the credit card agreement, so you must read it. You should be very
aware of your own personal insurance coverages. Contact your
personal automobile insurer before renting a vehicle and find out
what coverage you have while renting a vehicle, and confirm that it
covers you for your intended usage if you expect it to cover you
when you rent a vehicle.
In the event of an accident, you should call
your credit card company, the rental company, and your automobile
insurance company immediately. Be ready to gather appropriate
information in respect of the accident, like the police report, and
the other vehicle insurance and driver documents. Take photographs
of the damages to the vehicles. This information will be required
in order to process your claim. Do not delay reporting the claim as
there are often short deadlines.
There are many pitfalls with credit card
automobile insurance and car rental insurance. When trying to
juggle credit card automobile rental insurance, the insurance
offered by the rental car company and your own personal automobile
insurance, you may fall into a gap which can leave you without
coverage. You do not want to pay for something you do not need
(rental insurance can be more expensive than the rental itself).
However, you also do not want to risk large damage bills, or
personal exposure for any injury claims, which could be financially
Before renting a vehicle and accepting, or declining, the rental
car insurance and using your credit card, be clear on what
available insurances there are and you have, and what the
exclusions are so that you can be sure you are fully covered for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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