Do You Need Coverage for Rental Car Reimbursement?

Add this coverage to your auto insurance policy to cover rental car costs after an accident

If you’ve ever been in a car accident, you know the sinking feeling you get when you realize your car needs repairs. Whether your car requires body work or something that’s more than ‘skin deep,’ being without your car can be a challenge.

That’s where coverage for rental car reimbursement makes life a little easier. Rental Expense coverage helps pay rental car costs while your vehicle is being repaired after an accident or covered claim. There is usually a per-day and per-accident limit for Rental Expense coverage.

Coverage for Rental Car Reimbursement is optional

When you buy a car insurance policy that includes comprehensive and/or collision coverage, you will often be asked whether you want to add coverage for rental car reimbursement to your policy for an additional fee. This type of coverage is not required. It is optional. That’s why it’s important to verify that you have this coverage and not just assume that you do. When checking your coverage, be sure to ask your insurance company whether you have added Rental Expense coverage for each vehicle on your policy that has Comprehensive and/or Collision coverage.

Other uses for Rental Expense coverage

Coverage for rental car reimbursement may help you, even if you haven’t had an accident. Depending on the coverage in your car insurance policy, your insurance may also cover cost of a rental car if your car is damaged by theft, vandalism or even severe weather.

This coverage does not apply if a vehicle is in a repair shop due to normal maintenance or repairs. It will also not cover the cost of gas for the rental. Your insurance policy will include specific details about your Rental Expense coverage.

Generally, you can only rent a vehicle similar in size to the one being repaired. You can use the rental car until your damaged vehicle is back on the road or your coverage limit expires, whichever happens sooner. (If your vehicle is totaled, it’s a good idea to start looking for a replacement right away, because the rental vehicle must be returned within a few days after your insurance company provides the settlement amount.)

Choosing a rental car company

When using this coverage, you have the right to select any rental car company; but:

  1. Your insurer may have a direct billing arrangement with several rental car companies that will bill your insurer directly. This means you can get a rental vehicle (for up to your daily policy limit) without having to pay the full rental cost out of pocket.
  2. If you decide to use a different provider, you may need to pay costs up front and submit receipts for reimbursement.

Is this the same as Rental Car Insurance?

Rental Expense coverage and Rental Car insurance are not the same. When you rent a car for other reasons — such as vacation or travel — Rental Expense coverage does not apply. In that case, check your existing auto insurance policy to see if it includes coverage for a rental car. If it does not, you may need to purchase Rental Car insurance from the rental car provider.

For more on the differences between the various types of coverage, read Auto Insurance for Your Rental Car.