7 Things You Should Know About Rental Car Coverage

Posted by Matt Schwartz on Wed, Nov 10, 2021 @ 10:11 AM


Car accidents can be traumatic, and the last thing you need to worry about after having one is how you’re going to get to and from work every day while your vehicle is being repaired. Trying to arrange alternate transportation can be a headache, but rental car reimbursement coverage can help lessen the stress and save you some money.

An article on grangeinsurance.com lists seven things you should know, and consider, before buying rental car reimbursement coverage:

  1. It’s optional.
    Rental reimbursement coverage does not automatically apply after an accident. As an optional coverage, it must be purchased separately. A common misconception is that auto insurance automatically covers the cost of a replacement rental car. In reality, you often have to select this coverage and apply it to the policy.
  2. There is a limit.
    You’ll likely have a per day and per occurrence limit. For example, if you have a 25/750 limit, your insurance company will pay up to $25 per day but no more than $750 per claim for the rental vehicle. Most insurance companies will offer several different options, allowing you to choose the limit that is right for you.
  3. Your vehicle must be in the shop due to a covered loss.
    Rental reimbursement coverage can be used while your vehicle is being repaired after an accident or another covered loss, not for routine maintenance or leisure. So, if your car is at the body shop after an accident, a rental car is covered up to your limit. But if your car is undergoing routine maintenance that will keep it in the shop overnight or you are renting a vehicle for a family road trip, then rental reimbursement coverage would not apply.
  4. You can use it right away.
    After reporting a claim, if your vehicle isn’t drivable, you can be authorized for a rental car right away. Otherwise, you will be relying on the at-fault driver’s insurance company, and you may have to wait a little while before they can assess the claim and agree to pay for a rental car. With rental reimbursement coverage, there’s no waiting.
  5. No need to worry about additional insurance.
    For the most part, when you have collision and comprehensive coverage in your auto insurance policy, it will transfer to the rental vehicle, eliminating the need to purchase additional coverage from the car rental agency. Check with your agent, who will be able to tell you when this applies.
  6. You may not need it at all.
    If you have access to another vehicle, rideshare service or public transportation in the event your vehicle isn’t drivable, you may not need rental reimbursement coverage. But if you prefer the safety net of having a rental available if you need it, you may want to opt-in to this coverage.
  7. It costs less than you might expect.
    One year of rental reimbursement coverage will typically cost less than one day of out-of-pocket rental car expenses.

- Insurance Information Institute

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Topics: Personal Insurance