Rental Reimbursement Coverage
Rental reimbursement (or rental car coverage) is a type of optional car insurance coverage that helps pay for the cost of a rental car while your vehicle is being repaired after a car accident or after suffering damages that are covered through your car insurance policy.
This coverage is not required as part of your car insurance policy, but is beneficial if you do not have a secondary vehicle and need to travel to work or school while your car is undergoing auto repair.
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About Rental Reimbursement Coverage
Rental car reimbursement coverage typically helps pay for rental car costs when your car's damages are covered by your comprehensive and collision coverages. For example, you may need to rent a car if your own car has been damaged:
- In a car accident.
- By theft or vandalism.
- By severe weather.
When using rental reimbursement coverage, there are usually 2 different options:
- You can rent a car from an approved provider and have them bill your insurance company directly. Contact your car insurance provider to learn more about this option.
- You can rent a car from the business of your choice and pay for the cost up front. Then, you will need to submit receipts and a claim form in order to be reimbursed for the cost of the rental vehicle.
There is often a per-day and per-accident limit for rental reimbursement coverage.
For example, your rental reimbursement coverage may have a limit of $25 per day or $750 per accident. This means that your insurance policy will only pay $25 per day for a rental vehicle, and that coverage will stop once you've hit the $750 limit.
You are generally allowed to rent a vehicle that is similar to the one that is being repaired when you're using rental reimbursement coverage. However, if you're expecting the repairs to be time-consuming, you may want to choose a lower-cost vehicle in order to ensure that your rental reimbursement coverage does not run out before your vehicle has been repaired.
The cost for rental reimbursement coverage will vary according to your auto insurance company and the level of protection you select. The coverage is usually fairly inexpensive.
Rental Reimbursement Policy Exclusions
If you are considering purchasing rental reimbursement coverage, keep in mind that this protection only covers rentals needed while your car is being repaired for damages covered under your car insurance policy.
It will not offer reimbursement for rentals that are needed while your regular vehicle is in the shop for normal maintenance or repairs, and it will not cover rentals for recreational purposes.
Insurance for Rental Vehicles
Many car rental businesses will ask if you want to purchase additional coverage to insure the rented vehicle in the event of an auto accident. Your rental reimbursement insurance coverage does not cover this added cost.
Fortunately, if your car insurance policy includes collision and comprehensive coverage on your regular vehicle, this protection typically transfers to the rental car you are driving while your vehicle is being repaired.