Rental reimbursement insurance is car insurance coverage designed to cover the cost of a rental car after a covered insurance claim. It generally can be used after a covered claim under a comprehensive or collision insurance policy.
Like other types of insurance, it provides coverage up to a set limit. This is either a total amount or a specific amount per day. For example, it could reimburse drivers for up to $1,000 of rental car expenses or pay them up to $30 per day to cover rental car expenses.
Rental reimbursement insurance is usually not part of standard insurance coverage. It can be purchased as an add-on or additional coverage.
How Does Rental Reimbursement Insurance Work?
Rental reimbursement insurance is additional coverage that must be purchased before an accident or loss. When you need a rental car while your car is being repaired after an accident or covered loss you’ll:
- File a claim. This works like other types of claims and is pretty straightforward. It can usually be done online.
- Check your coverage. Before getting a rental car, know your coverage limits.
- Ask your auto insurance company about rental car partnerships. Most car insurance companies partner with rental car companies. This means better rates and that the car is paid for directly by the insurance company. If your insurance company doesn’t have a relationship with a rental car company, you’ll have to pay for the car and submit receipts for reimbursement.
- Select a car. Once you’ve found the right company and know your policy limits, you can reserve and start using a rental car. If you’re paying for the rental car, make sure that you keep all receipts and timely submit them to your insurance company.
When Does Insurance Not Cover a Rental Car
Even with rental reimbursement insurance, there are times that your rental car will not be covered. For example, rental reimbursement insurance will not pay for a rental vehicle due to
- Mechanical Issues. If your car is in the shop for mechanical issues, you will not be reimbursed for the cost of your rental car. Reimbursement insurance only covers covered losses and does not apply to standard mechanical problems.
- Regular Maintenance. If your car is in the shop for regular or routine maintenance, you cannot use rental reimbursement insurance to pay for your rental car.
- Travel rental cars. If you travel to a different city for work or vacation, the cost of your rental car will not be covered by rental reimbursement insurance.
- Cars not covered by the policy. If you have multiple cars, you can only get rental reimbursement if the covered vehicle is in the shop for repairs caused by a covered loss.
Should Drivers Purchase Rental Reimbursement Coverage?
For most drivers, the answer to this question is yes. The price of rental reimbursement insurance does not substantially increase the amount of your insurance payment. In contrast, If your car is ever damaged in an accident or covered lost, the cost of a rental car can quickly add up.
Data from the Insurance Information Institute shows that on average cars are in the repair shop for two weeks after an accident. If you need a rental car for this entire period, it can easily be a few hundred dollars.
Plus, even if another driver is at fault for your accident and ultimately will pay for repairs and expenses, it can be a long time before they pay the claim. If you have rental reimbursement insurance, you can get the car when you need it and your insurance will pay for it. Once the other driver’s insurance company pays your claim, your insurance company will be reimbursed for this cost.
Finally, it’s helpful to know that you can’t add reimbursement insurance after an accident or covered loss. For example, if you are in a car accident and learn that your car will be in the shop for six weeks, you can’t then add rental reimbursement insurance. It has to be added to your policy before the covered loss.
To help avoid unavoided expenses and inconveniences, it’s a smart decision to add rental reimbursement insurance to your car insurance policy.
Contact Auto Insurance Experts to Learn More
For questions about rental reimbursement insurance or to add this coverage, contact GoAuto Insurance. Our team works directly with customers to help them save money on auto insurance. We only sell auto insurance, so we understand this product better than anyone else in the industry.
