If you find yourself in a car accident, you may have to wait days or even weeks for your car to be repaired. But what if you need to stay mobile during this time? That’s where rental reimbursement coverage comes in. This optional insurance coverage, offered by some providers, helps cover the cost of a rental car or repairs after a covered accident. Let’s dive deeper into how it works and what you need to know.
How Does Rental Reimbursement Work?
Rental reimbursement coverage is an optional add-on offered by certain insurance companies. It helps cover the expenses of renting a car while your vehicle is being repaired due to a covered accident. This coverage may also extend to vehicles you don’t own, such as rental cars for family vacations.
To qualify for rental reimbursement, you usually need comprehensive and collision coverage in your policy. Some providers may refer to this as “transportation expense coverage,” which can include other forms of transportation like buses, trains, and car services.
It’s important to note that rental reimbursement coverage only lasts while your car is at a repair facility or considered unsafe to drive. Insurance companies set daily and overall limits for rental costs, typically ranging from $40 to $60 per day. The coverage usually lasts up to 30 days, but this can vary depending on the provider and can change if your vehicle is declared a total loss.
When it comes to renting a vehicle, you have two options for reimbursement:
- Preferred rental car company: Working with your insurance company’s preferred rental car company can simplify the reimbursement process. Some providers even allow the rental company to bill your insurance directly.
- Alternative rental company: If you choose a different rental car company, you can submit your receipts and a claim form to your insurance company for reimbursement.
It’s worth noting that rental reimbursement coverage usually does not have a deductible. However, if the cost of the rental car exceeds your daily and overall limits, you’ll have to cover the difference out of pocket.
Does Car Insurance Include Rental Reimbursement Coverage?
Typically, rental reimbursement coverage is not automatically included in your auto insurance policy. It’s an optional endorsement, also known as a “rider,” that you can add to your existing policy. This coverage extends to eligible claims within your comprehensive or collision insurance. Most insurers require both coverages to add a rental reimbursement endorsement.
Rental Car Reimbursement vs. Rental Car Insurance
It’s essential to distinguish between rental car reimbursement and rental car insurance. Rental car reimbursement is an add-on provided by insurance companies to cover the costs of a rental car while your vehicle is being repaired after a covered accident.
On the other hand, rental car insurance is a separate coverage offered by rental car companies. It protects you and the rental vehicle during the rental period. Although you must have at least liability insurance to rent a car, you may not need to purchase insurance through the rental company. Your existing auto insurance policy may extend coverage to rental cars.
Rental Car Reimbursement vs. Mechanical Breakdown Coverage
It’s important to note that rental car reimbursement coverage does not cover rental costs if your vehicle breaks down due to mechanical issues. Insurance companies only reimburse rental costs for covered accidents, not mechanical breakdowns.
However, some insurance providers offer optional mechanical breakdown coverage, which may include an allowance for rental car costs while your vehicle is in the shop. This type of coverage typically applies after your vehicle’s warranty expires or if your warranty doesn’t cover mechanical failures.
When Will Car Insurance Pay for Rental Costs?
Rental reimbursement coverage helps cover the cost of a rental car or alternative transportation while your vehicle is being repaired due to a covered accident. The specific accidents or perils covered depend on your insurance provider and policy.
If you have collision coverage, rental reimbursement coverage will help pay for a rental car while your vehicle is in the repair shop after a collision. If you have comprehensive coverage, it may also cover rental costs for repairs resulting from perils like hail, falling trees, branches, or vandalism.
When Will Car Insurance Not Pay for Rental Costs?
Even with rental reimbursement coverage, there are certain expenses that are not covered:
- Gas
- Mileage
- Security deposit
- Additional insurance coverage through the rental company
Insurance companies set daily and overall limits on rental reimbursement. If the daily rate for your rental exceeds the allotted limit, you’ll have to cover the difference. However, by selecting a rental car with a lower daily rate, you can extend your reimbursement benefits and avoid out-of-pocket expenses.
Additionally, it’s important to remember that rental reimbursement coverage does not cover rental costs for mechanical breakdowns.
Do You Need Rental Reimbursement Coverage If You Are Not at Fault in an Accident?
While the at-fault driver’s insurance may cover your rental car in an accident, utilizing your rental reimbursement coverage can be beneficial. By using your own coverage, you can avoid any delays in the claims process. If the other driver is found to be at fault, your insurance company will be reimbursed by the other driver’s provider.
TIME Stamp: Consider Adding Rental Reimbursement Coverage to Your Policy
Rental reimbursement coverage can be invaluable if you ever find yourself in an accident and need to rent a vehicle for an extended period while your car is being repaired. The cost of this coverage is relatively low compared to rental car expenses in most cases. To determine the best coverage options and limits for your needs, reach out to your insurance provider and request a quote. This is also an excellent time to compare rates from other insurance providers to ensure you’re getting the best deal.
Frequently Asked Questions (FAQs)
Who has the best car insurance with rental reimbursement coverage?
The best insurance company offering rental reimbursement coverage can vary based on your location, needs, and other factors. To find the best premiums, it’s recommended to obtain quotes from several insurance providers. Don’t forget to check with your current insurance company to see if they offer rental reimbursement coverage.
Which credit cards cover car rental insurance?
Several credit cards provide rental car insurance benefits. Some cards offer primary coverage, meaning you don’t have to file a claim with your personal car insurance first. Others provide secondary coverage, which covers expenses beyond what your personal insurance policy includes. Popular credit cards with car rental insurance benefits include Personal Finances Blog.
What happens if I get into an accident in a rental car?
If you’re involved in an accident while driving a rental car, your auto insurance policy may cover the damages. Rental car companies usually offer optional insurance coverage that you can purchase. Most states require you to have at least liability insurance to drive, and you need car insurance to rent a vehicle.
How long will insurance pay for a rental car?
The time limits for rental reimbursement coverage vary among insurance providers. Generally, coverage lasts up to 30 days, depending on your circumstances and the daily and overall limits of your policy.