Rental reimbursement insurance coverage will typically cover the cost of a rental car up to a certain dollar amount per day for a set number of days. Without rental reimbursement coverage, you may be responsible for the cost of a rental car if your car cannot be driven after an accident.
Rental insurance coverage helps cover transportation costs, such as a rental car or public transit fare, while your vehicle is being repaired after a covered accident.
It does not apply to routine maintenance or vacation rentals. Often called “rental car coverage” or “transportation expense coverage,” it is optional and requires an additional premium.
What does rental reimbursement typically cover?
Rental car reimbursement coverage helps you pay for a rental car, or for alternate transportation — such as bus fare or cab rides — but only if you need it because of a covered loss. When you can use rental reimbursement coverage depends on the other types of coverage you have on your car insurance policy.
For example, if you have collision coverage and you’re in a car accident, that is typically considered a covered loss. Your rental reimbursement coverage may help pay for transportation expenses while your vehicle is in the repair shop after the collision.
You can typically choose where to rent a vehicle, but some insurers partner with specific rental car companies. If you rent a vehicle from a company that has an agreement with your insurer, the rental car company may bill the insurance company directly, helping prevent you from paying out of pocket. If your rental company is not in your auto insurance company’s network, you’ll likely need to pay upfront for the rental car and then request reimbursement from your insurer.
If your car is damaged by hail, you’d need to have comprehensive coverage on your policy for your insurer to help cover the claim. Then, your rental reimbursement coverage may help cover the costs of your alternative transportation while your vehicle is in the shop to repair the hail damage.
Rental reimbursement coverage limits
Your insurance coverage is subject to limits, or the maximum amount your insurer will pay for a covered claim. Rental reimbursement coverage typically has a daily limit, and a maximum number of days it can be used. For example, your coverage may provide up to $30 per day for a maximum of 30 days, until your damaged car is usable again.
If the rental car you choose costs more or if you need to use it for longer, you’d have to pay out of pocket for the costs that exceed the limits. Read your policy so you know the limits of your rental reimbursement coverage before you need to use it.
Keep in mind that certain expenses may not be covered by rental reimbursement. For instance, the cost of gas is typically not included in rental reimbursement coverage.
Some insurers have direct billing options with some rental car companies. If you have a claim and need a rental car, let your claims representative know and they can review direct billing options. After a claim, receipts for rental car expenses may be submitted for reimbursement consideration subject to the terms of the policy.
How long will insurance pay for a rental car after an accident?
In most cases, you’ll have a daily limit for rental costs, an overall rental cost limit, and a total number of days that are eligible for rental car reimbursement. Exact coverage limits will vary by insurer, so it’s important to check for specific coverage information. With Progressive’s rental car reimbursement coverage, daily limits are typically $40–60 and coverage last up to a total of 30 days.
Who pays for a rental car after an accident?
If you carry rental reimbursement coverage, you can file a claim under your auto policy regardless of who caused the accident for possible payment under your policy.
If the other driver is at fault, their insurance may end up paying for your rental car. But using your collision and rental reimbursement coverage may be quicker and more convenient versus waiting for the other insurance company to complete their investigation.
FAQ
Rental reimbursement insurance helps cover transportation costs, such as a rental car or public transit fare, while your vehicle is being repaired after a covered accident. It does not apply to routine maintenance or vacation rentals.
It typically covers daily rental costs up to your policy’s limit, but it does not cover fuel, insurance for the rental car, or security deposits.
Since it is optional, you need to request it from your insurer and pay an additional premium. It is often bundled with comprehensive or collision coverage.
No, it only applies if your car is being repaired due to a covered claim, not for mechanical failures or routine maintenance.
If you rely on your car daily, this coverage can be useful, as rental costs add up quickly. However, if you have an alternative vehicle or access to public transportation, it may not be necessary.