What is Rental Reimbursement Coverage?
Dealing with the aftermath of a car accident is stressful enough, but what are you supposed to do when you find yourself without wheels? Whether your car is in the shop for two days or two weeks, you might have to rework your entire schedule to figure out how to get around.
This is where rental reimbursement coverage comes in. This coverage can ease some of the stress you undergo after a collision and can pay for transportation costs as well.
What Does Rental Reimbursement Cover?
It’s important that you understand the range and extent of rental reimbursement coverage. This coverage typically pays for the cost of a rental car while yours is being repaired after a covered accident. These collisions include scenarios such as:
- Colliding with a stationary object
- Hitting wildlife on the road
- Colliding with another vehicle
In these scenarios, your insurance company will reimburse you for the cost of your daily rental. If you already have collision and comprehensive insurance, you can add rental reimbursement to your existing coverage.
Rental reimbursement coverage isn’t only limited to the cost of rental cars. If their insurance company allows it, some policyholders choose to save money by having the cost of their public transportation reimbursed instead of renting a vehicle.
How Does Rental Reimbursement Work?
When you’re ready to rent a car after an accident, there are typically two options to choose from:
- Option 1: You will find your own rental company, rent the car yourself, and pay for it out of pocket. You will then submit the bill to your insurance company for reimbursement. This option is perfect for drivers looking for a specific car model to rent or those wanting to rack up points or travel rewards.
- Option 2: You choose to let your insurance company handle your rental for you, which is generally the more common option of the two. They will handle all the paperwork involved, and you won’t have to pay for your rental out of pocket. If your insurance company has a partnership with a rental company, they can get you better rates than you would on your own.
Limits To Rental Reimbursement Coverage
As great as it is to have rental reimbursement coverage, it doesn’t extend indefinitely. Here are a few limits to keep in mind when using your rental reimbursement coverage:
- Claim Limits: Keep in mind that your insurance company will not pay for a rental car forever. Each policy has a maximum amount of rental days and a maximum reimbursement limit. For example, let’s say that your insurance will issue you a daily limit of $30 per day for up to 30 days. If the cost of your rental car exceeds this amount, or you need it for longer than 30 days, you’ll need to start paying for it out of pocket.
- Gas and Other Costs: Don’t expect them to reimburse you for the cost of your security deposit or your gas expenses for the week. You’ll have to pay for those expenses yourself.
- Car Maintenance and Vacations: This coverage also does not extend to routine maintenance on your car or if you choose to rent a car on vacation. You’ll need to look for rental car insurance to make sure you’re protected while renting a car on holiday.
Do I Need Rental Reimbursement When I’m Not at Fault?
When you aren’t at fault in a collision, the other party’s insurance should cover the cost of your rental.
Keep in mind that things aren’t as cut and dry if the fault is contested. When this happens, you’ll have to get in contact with your insurer to set up a rental. If the other driver is proved to be at fault, then your insurance company will deal with theirs to reimburse you for your rental costs.
How Much Does Rental Reimbursement Cost?
The cost of your rental reimbursement coverage depends entirely on you and the car you drive. If you spend a lot of time on the road, you will likely pay more than someone who drives less.
Typically, rental reimbursement coverage will not require you to pay a deductible.
Generally, this coverage will run you about $30 to $65 per year for basic coverage.
Is Rental Reimbursement Worth It?
When you’re in an accident and your car is sent in for repairs, while the other party’s insurance may pay for repairs and your rental car, this isn’t always the case.
On the other hand, if the collision was your fault, your liability insurance will kick in to cover the costs of the other party’s rental car. However, you’ll be stuck footing the bill for your repairs and your rental car during that time. Renting a car for a few days or weeks can add up quickly. If you have a tight budget, you may not have the extra cash to pay for a rental after a collision.
It’s impossible to estimate how long your car will be in the shop after an accident, and this is where rental reimbursement coverage comes in. When weighing the cost of coverage with the cost of a rental per day, the savings outweigh the cost of daily rentals. If you’re already inconvenienced with repairs, the last thing you want is to deal with a hefty car rental bill.
How To Find Affordable Car Insurance
To find the most affordable car insurance rates, the best course of action is to get out there and compare rates for yourself.
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