Should You Have Rental Car Reimbursement Coverage?

WRITTEN BY: Julia Matseikovich


It can be quite stressful when you’re involved in an auto accident and must send your vehicle to the repair shop. You are reeling from the aftermath of an accident and may find yourself without a car. Thankfully, rental car reimbursement coverage can help.

Rental car reimbursement is an add-on coverage designed to step in and help policyholders pay for transportation-related costs, like rental vehicles or public transportation, if their cars are getting repaired under an insurance claim. 

What is rental car reimbursement coverage?

Rental car reimbursement coverage is an additional and optional coverage available for auto insurance policyholders. This insurance option covers public transportation expenses or the cost of a rental car. But it only kicks in if you have an open claim.

In most cases, you’ll first need comprehensive coverage and collision coverage on your vehicle to add this rental coverage to your insurance policy. 

The coverage helps pay for alternative transportation up to a specific dollar amount each day for a particular amount of days or less. 

If you don’t have this beneficial coverage, you’ll need to cover the costs of your rental car entirely out-of-pocket. Keep in mind this coverage is only for covered claims due to an accident and not for routine maintenance.

Does it come with all car insurance policies?

In most cases, rental car reimbursement coverage must be added to your insurance policy. It’s not generally coupled with your auto insurance and is considered additional coverage. 

However, this isn’t always the case. If you added coverage when you first got your initial policy, you might have it. But if you didn’t, it’s an easy and quick process to add it after the fact.

How does rental car reimbursement work?

Rental car reimbursements work differently, depending on who you have insurance with. Some insurance carriers have a direct correlation and relationships with rental car companies. 

In these circumstances, the reimbursement process is easy and efficient, leaving you, the policyholder, with virtually not much to handle. Some carriers will cover the rentals directly through the insurance company without making the policyholder wait for reimbursements. 

On the other hand, some carriers require a lot more leg work before they reimburse you. Often, you need to save and submit your rental vehicle receipts before your insurance company reimburses you.

Coverage limits

Coverage limits in auto insurance mean the maximum dollar amount your insurance company will contribute towards a covered claim. In most circumstances, rental car reimbursement coverage has daily limits. 

For instance, your rental car coverage may pay $40 daily, with a maximum of 30 days. If you must exceed these limits because of the daily cost of the rental, or the amount of time it takes to repair your vehicle, you’ll be responsible for the remaining expenses out-of-pocket. 

Always be sure to contact your insurance carrier ahead of time to know your limits and coverage amounts.

Is rental car reimbursement coverage worth it?

Rental car reimbursement is an incredibly beneficial coverage to obtain. Many households don’t have second vehicles at home, nor daily transportation from a friend or family member.

Not having your vehicle can impede work schedules, shopping trips, and more. Because of this, rental car reimbursement is a coverage worth its weight in gold. 

The average time a car is in the shop following an accident is around 11 days. That’s 11 days of potentially missing work or school, which can cost you far more than the amount it costs each month to pay for rental car reimbursement coverage. 

And keep in mind, not only does rental car reimbursement reimburse for the cost of rental vehicles, but for forms of public transportation too, like public buses or subways. This makes it an excellent added protection for those who can’t afford to be without a form of transportation at any time, even though it is inexpensive.


Is rental car reimbursement coverage expensive? 

Rental car reimbursement coverage is quite affordable for most policyholders. The typical rental reimbursement policy costs drivers less than $5 monthly but ranges from $2 to $15 monthly. 

When you compare those costs to the costs of a rental car, which can average about $130 per day, it’s clear that this insurance is worth it. 

What’s the difference between rental reimbursement coverage and rental car insurance? 

A rental reimbursement insurance policy is an additional form of coverage that you can add to your existing auto policy. It reimburses you for renting a car while you repair your vehicle due to an approved claim.

You buy rental car insurance coverage when you rent a vehicle for travel purposes that you want insured while you drive it to ensure you won’t have to pay out-of-pocket should an accident arise.

Will you need to pay a deductible when you use rental reimbursement coverage?

Rental car reimbursement coverage generally won’t carry a deductible. But in most cases, you need to pay a deductible on your general auto insurance policy. This is because rental car reimbursement doesn’t kick in unless you file a claim.

How long will the insurance company pay for a rental vehicle after a car accident? 

In most circumstances, insurance companies will have a set dollar amount in which they’ll contribute towards the cost of a rental car and a set amount of specified days in which they’ll cover a rental. Every insurance company’s limits will vary, so it’s best to ensure you know them before proceeding with a rental. 

Add rental car reimbursement coverage today 

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