If you ever wreck your car, then it’s understandable that the car might need to go to the shop for repairs. In the meantime, you might need a rental vehicle to get around until you get the car back. Your auto insurance might offer a couple of incentives called rental car coverage or rental reimbursement. Your policy might apply to both the rental vehicle itself, and the costs you must pay for renting. Here’s how it works.
Understanding Rental Car Reimbursement
When preparing to repair your wrecked car, check your insurance for rental car reimbursement coverage. Some policies refer to this coverage as loss of use insurance.
Generally, your policy will stipulate that it will pay you a certain amount of money both per day and in total. For example, your policy might contain rental car coverage for $100/$2,000. That means the policy will pay up to $100/day for the costs of renting the vehicle. However, it will only pay up to $2,000 total, so once you reach that limit in rental expenses, you’ll have no more coverage.
Your insurer might request that the rental company bill them for the rental costs directly. Or, your insurer will send you the money for the rental costs. They will estimate how long your repairs will take, and then pay you accordingly.
Your policy might not pay for all your rental car costs, however. Gas and mileage, security deposits or other taxes and fees might be yours to pay. All the same, the coverage can still alleviate the costs of rental vehicles overall.
Insurance for Your Rental Car
When you get your rental car, your existing auto policy might continue to provide a degree of insurance on that vehicle. You will continue to have liability coverage as required by your state.
Also, your policy might cover physical damage to the vehicle from wrecks and other damage. But, to get this coverage, you will need collision and comprehensive damage coverage. In fact, many rental companies require the insured driver to carry coverage for physical damage before they rent to the driver.
Some rental companies offer supplementary insurance for customers to buy as long as they have the rental car. Often it can help further reduce out of pocket costs in case of a problem while the customer has the rental. Still, talk to your insurance provider about where your existing policy limits coverage. This can help you decide if you need to buy the rental company’s supplement at all.