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If Your Car Breaks Down, Will Insurance Cover a Rental?

If you own a vehicle, chances are you might encounter a car accident at some point, as they are an unfortunate aspect of life. According to data from the National Highway Traffic Safety Administration (accessible through “National Statistics”), there were 232,781,797 licensed drivers in the U.S. in 2021. In that same year, an astonishing 6,102,936 motor vehicle traffic accidents were reported. please read carefully If Your Car Breaks Down, Will Insurance Cover a Rental

In the event of an accident, the wait time for your car to be repaired could extend to days or even weeks. Rental reimbursement coverage is designed to assist in covering the expenses associated with renting a car or repairing your vehicle after a covered accident. This optional insurance coverage is available through select insurance providers and can be added as an extra feature to your auto insurance policy.

How does rental reimbursement function?

Rental reimbursement coverage is an optional type of auto insurance offered by certain insurance companies, aiming to offset the expenses incurred while renting a car during the repair period following a covered accident. Depending on your policy, this coverage may extend to non-owned vehicles involved in a covered accident, such as a rental car used for a family vacation.

Typically, obtaining rental reimbursement requires having comprehensive and collision coverage as part of your policy. Some insurers may label this as “transportation expense coverage,” especially when it encompasses various transportation modes beyond rental cars, such as buses, trains, and car services.

The coverage duration is generally tied to the time your vehicle is at a repair facility or is considered unsafe to drive. Insurance companies set daily and overall limits for rental costs, usually ranging from $40 to $60 per day, depending on the chosen coverage. Typically, coverage lasts up to 30 days, though this timeframe may vary depending on the provider, with adjustments if the vehicle is declared a total loss.

Two options typically exist for rental car reimbursement:

  1. Preferred rental car company: Opting for your insurance company’s preferred rental car provider often streamlines the reimbursement process, with the possibility of the rental company directly billing your insurance.
  2. Alternate rental company: Choosing a different rental car company means you can submit receipts and a claim form to your insurance company for reimbursement.

Notably, rental reimbursement coverage usually does not involve deductibles. If the rental car expenses surpass your daily and overall limits, you will be responsible for covering the excess costs.

Does car insurance include rental reimbursement coverage?

Rental reimbursement coverage is generally not inherently part of an auto insurance policy. It is instead an optional insurance endorsement, commonly referred to as a “rider,” that you have the option to include in your existing policy.

This reimbursement coverage applies to qualifying claims covered under your comprehensive or collision insurance. Often, insurance providers mandate having both comprehensive and collision coverages in place before allowing the addition of a rental reimbursement endorsement.

Rental car reimbursement vs. rental car insurance

Rental car reimbursement and rental car insurance are distinct concepts. Rental car reimbursement is an optional add-on provided by insurance companies, covering the expenses of a rental car while your vehicle undergoes repairs following a covered accident.

In contrast, rental car insurance is a separate coverage offered by rental car companies, safeguarding both you and the rented vehicle throughout the rental period. While a minimum requirement is having liability insurance to rent a vehicle, purchasing insurance directly from the rental company may not be necessary, as your existing auto insurance policy could extend to cover cars you rent.

Rental car reimbursement vs. mechanical breakdown coverage

If your vehicle experiences a breakdown, rental car reimbursement coverage does not cover the expenses of a rental vehicle during the repair period. This coverage is specifically designed for reimbursing rental costs related to covered accidents, excluding issues stemming from mechanical breakdowns. Insurance companies limit rental reimbursement to instances of covered accidents rather than mechanical problems.

However, certain insurance providers offer optional mechanical breakdown coverage, which may include provisions to cover rental car expenses while your vehicle is undergoing repairs. Typically, this type of coverage comes into play after a vehicle’s warranty has expired or in cases where the warranty does not encompass mechanical failures.

When will car insurance pay for rental costs?

Rental reimbursement coverage is designed to assist in covering the expenses associated with renting a vehicle or securing alternative transportation while your vehicle is undergoing repairs due to a covered accident. The particular accidents or perils covered by this policy vary depending on your insurance provider and the specifics of your policy.

For instance, if you have collision coverage, rental reimbursement coverage would contribute towards the cost of renting a car while your vehicle is in the repair shop following a collision. On the other hand, if you have comprehensive coverage, it may extend to cover rental costs for repairs resulting from covered perils such as hail damage, incidents involving falling trees or branches, or vandalism. The extent of coverage is contingent on the terms outlined in your insurance policy and the offerings of your insurance provider.

When will car insurance not pay for rental costs?

Despite having rental reimbursement coverage, certain out-of-pocket costs may not be covered while your car is in the repair shop. Rental reimbursement coverage typically excludes the following expenses:

  1. Gas: The cost of fuel for the rental vehicle is not covered by rental reimbursement.
  2. Mileage: Any additional mileage fees incurred during the rental period are typically not covered.
  3. Security deposit: The initial security deposit required by the rental company is usually not included in the coverage.
  4. Additional insurance coverage through the rental company: Any supplementary insurance you opt for through the rental company is not covered by rental reimbursement.

Insurance companies establish daily and overall limits on rental reimbursement. If the daily rate for your rental exceeds the specified limit, you will be responsible for covering the difference. To mitigate out-of-pocket expenses, you can extend your reimbursement benefits by selecting a rental car with a lower daily rate, especially if your vehicle is unavailable for an extended period.

It’s important to note that rental reimbursement coverage does not extend to rental costs incurred due to mechanical issues. If your car breaks down for mechanical reasons, this coverage will not cover the rental expenses during the repair period.

Do you need rental reimbursement coverage if you are not at fault in an accident?

In the event of an auto accident where the other driver is deemed at fault, their insurance company may be responsible for covering the costs of your rental car. The decision of whether to utilize your rental reimbursement coverage, regardless of fault, may depend on the speed of the claims process.

If you choose to use your rental reimbursement coverage promptly, it can help ensure that you have access to a rental vehicle while waiting for the resolution of the claims process. If the other driver is later determined to be at fault, your insurance company will seek reimbursement from the at-fault driver’s provider.

This approach can help streamline the process for you, providing timely access to a replacement vehicle and allowing for smoother coordination between insurance companies to resolve the financial aspects of the rental. However, individual circumstances may vary, and it’s advisable to consult with your insurance provider to determine the best course of action based on the specific details of the accident and your coverage.

DurbeenMedia: Consider adding rental reimbursement coverage to your policy. 

Rental reimbursement coverage can be a valuable addition in case of an accident, assisting if you need to rent a vehicle for an extended period while your car is being repaired. The cost of this coverage is often relatively low when compared to typical rental car expenses. Insurance providers usually offer various coverage options and limits tailored to your needs and budget.

It’s advisable to contact your insurance provider to inquire about the availability of rental reimbursement coverage and to obtain a quote. Additionally, when considering adjustments to your insurance policy, it’s a good opportunity to explore rates offered by other insurance providers. Comparing rates during such times can help ensure you are getting the most suitable coverage at a competitive price.

Frequently Asked Questions (FAQs)

Who has the best car insurance with rental reimbursement coverage?

Determining the best insurance company with rental reimbursement coverage depends on individual needs, location, and various factors. To find the most suitable option, it’s recommended to obtain quotes from multiple insurance companies. Comparing premiums and coverage across different providers can help you identify the one that aligns best with your requirements.

As part of this process, it’s important to check with your current insurance provider to inquire about the availability of rental reimbursement coverage and to understand the terms and conditions associated with their offering. This information will contribute to making an informed decision about the insurance company that provides the most comprehensive and cost-effective coverage for your specific situation.

Which credit cards cover car rental insurance?

Many credit cards offer rental car insurance benefits, and it’s essential to be aware of the coverage details. Some cards provide primary coverage, meaning you don’t have to go through your car insurance first, while others offer secondary coverage, which comes into play after your insurance is exhausted. Here are some popular credit cards with car rental insurance benefits:

  1. Chase Sapphire Reserve®
  2. Chase Sapphire Preferred®
  3. Capital One Venture X Rewards
  4. United Club℠ Infinite
  5. American Express Gold
  6. Chase Freedom Flex℠

Before relying on credit card rental car insurance, it’s crucial to review the specific terms and conditions of each card’s coverage. Coverage limits, types of vehicles covered, and other details may vary. Additionally, make sure to use the respective credit card for the rental transaction to activate the insurance benefits. Always contact the credit card issuer to clarify any uncertainties and ensure you understand the coverage provided

What happens if I get into an accident in a rental car?

Your auto insurance policy might extend coverage to a rental car in case of an accident. However, it’s crucial to check the specifics of your policy, as coverage can vary. Rental car companies also typically offer optional insurance coverage that you can purchase for added protection.

In most states, having at least liability insurance is a legal requirement to operate a vehicle. This legal obligation extends to renting a car, meaning you must have car insurance to rent a vehicle. Before relying solely on your existing policy, it’s advisable to understand its terms and limitations, and if needed, consider additional coverage provided by the rental car company for comprehensive protection during the rental period.

How long will insurance pay for a rental car?

Rental reimbursement time limits can vary among insurance providers. Typically, coverage lasts up to 30 days, but the specific duration depends on factors such as your situation and the daily and overall limits outlined in your policy. It’s essential to review your insurance policy details and consult with your insurance provider to understand the specific terms and limitations associated with rental reimbursement coverage in your particular case.

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