Rental Reimbursement Coverage and How it Works

If you own an insured vehicle and have an accident covered by your auto insurance, you can take your vehicle to a body shop to repair it. Depending on the extent of the damage, you may be without a vehicle for a while. Suppose you don’t have access to a second vehicle while yours is in the repair shop. In that case, you may want a rental vehicle—and if you purchased additional rental reimbursement coverage on your auto insurance policy, you could be driving one in no time. 


Rental reimbursement coverage doesn’t automatically come with an auto insurance policy, so you’ll pay a fee to add this coverage, but it sure is nice to have when you need it. It’s an option that’s relatively inexpensive and pays the cost of your rental vehicle while your vehicle is getting repaired. With the added coverage, you’re covered for any incident your comprehensive or collision insurance would typically cover with your rental vehicle. 


How Does Rental Reimbursement Work? 


If you have an accident, the driver who caused the collision usually pays for any damage. If someone hits your car and needs repairs, their insurance should pay for repairs and a rental vehicle. But that’s not always the case.  


If you and the other driver disagree with the police report after the accident, it can become more complicated. If you have rental reimbursement coverage, you can contact your insurer to arrange for a rental. If the other driver is later determined to be at fault, your insurer can work with their insurer to get reimbursed. Rental reimbursement coverage is only needed when the accident is not someone else’s fault, and you have collision or comprehensive auto coverage. 


How Much Coverage Do I Need? 


Rental reimbursement coverage has limits like other insurance policies. Most policies have a daily and total claim maximum. The daily amount is the total your insurer will pay per day for your rental vehicle. Any amount over the limit comes out of your pocket. 


The total per claim amount is the maximum you are reimbursed after each accident. These might be either a dollar value or a time limit (e.g., 30 days). If you need a vehicle for an extended time, you can quickly reach your maximum.  


Look at rates in your area and whether you need access to a vehicle to determine how much coverage you need. If you’re a weekend driver, you may not need many days of coverage. However, if you commute five days a week, you want enough coverage for this daily drive. If you’re accustomed to driving a luxury vehicle or a larger SUV, your rental cost for these vehicles may be higher, and you should consider purchasing more coverage.  


A rental vehicle isn’t your only option. To keep your daily limits and auto insurance premium low, your insurer may let you put money toward public transportation instead of a rental vehicle. Our agents at McCartan Insurance Group, Inc. can help you determine if rental reimbursement coverage is a sensible addition to your auto insurance policy.