When your car is in the shop after an accident, daily life doesn’t stop. You still need to get to work, run errands, and handle family responsibilities. This is where rental reimbursement coverage comes in. But what exactly is it, how does it work, and is it worth adding to your auto insurance policy?
In this guide, we’ll break down everything you need to know about rental reimbursement coverage in simple terms, so you can decide whether it’s right for you.
What Is Rental Reimbursement Coverage?
Rental reimbursement coverage is an optional auto insurance add-on that helps pay for a rental car (or other temporary transportation) while your insured vehicle is being repaired due to a covered claim, such as an accident.
It does not cover routine maintenance, breakdowns, or situations where your car is unavailable for non-covered reasons.
In short:
If your car is damaged in a covered accident and needs repairs, rental reimbursement coverage helps cover the cost of a rental car.
How Does Rental Reimbursement Coverage Work?
Here’s how it typically works step by step:
- You’re involved in an accident or incident covered by your policy (e.g., collision or comprehensive claim).
- Your car goes to a repair shop.
- You rent a vehicle or use an approved transportation option.
- Your insurance company reimburses you for eligible costs, up to your policy’s daily and total limits.
Most insurers set limits like:
- $30–$50 per day
- $900–$1,500 maximum per claim
Once you reach either limit, you’ll be responsible for any additional costs.
What Does Rental Reimbursement Coverage Include?
Coverage may vary by insurer, but it usually includes:
- Rental car costs while your vehicle is being repaired
- Temporary transportation after theft (once the waiting period is met)
- Sometimes alternative transportation (rideshare, public transit), depending on the insurer
Some insurance companies also partner with major rental agencies like Enterprise, Hertz, or Avis to streamline the process.
You can learn more about how insurers structure this coverage from trusted sources like the
Insurance Information Institute: https://www.iii.org/article/what-rental-reimbursement-coverage
What Is NOT Covered?
Rental reimbursement coverage does not pay for:
- Routine maintenance or mechanical breakdowns
- Vacations or personal rentals
- Fuel, deposits, or insurance purchased from the rental company
- Time when your car is undrivable but you choose not to repair it
- Accidents not covered under your policy
It’s also important to note that this coverage only applies if you already carry collision or comprehensive coverage.
Rental Reimbursement vs. At-Fault Driver Coverage
If another driver is at fault, their liability insurance may cover your rental car. However:
- Claims can take time to process
- Liability coverage limits may be low
- The other insurer may dispute fault
Rental reimbursement coverage gives you immediate access to transportation without waiting on another insurer, making it a convenient backup option.
How Much Does Rental Reimbursement Coverage Cost?
Rental reimbursement coverage is relatively affordable. On average, it costs:
- $2–$6 per month
- $20–$60 per year
Considering daily rental car rates often range from $40–$100 per day, this coverage can pay for itself quickly after just one claim.
For cost comparisons, you can reference data from
NerdWallet: https://www.nerdwallet.com/article/insurance/rental-reimbursement-insurance
Do You Need Rental Reimbursement Coverage?
You may want to consider it if:
- You rely heavily on your car for work or daily life
- You don’t have access to a second vehicle
- You want peace of mind after an accident
- You can’t easily afford out-of-pocket rental costs
You may not need it if:
- You have another car readily available
- You rarely drive
- You’re comfortable paying for rentals yourself
How to Add Rental Reimbursement Coverage
You can usually add rental reimbursement coverage:
- When buying a new auto insurance policy
- During policy renewal
- By contacting your insurance agent or provider directly
It’s best to review the daily limit, total limit, and waiting periods before adding it.
Final Thoughts
Rental reimbursement coverage is a small but powerful addition to an auto insurance policy. While it’s optional, it can save you hundreds of dollars and significant stress when your car is unexpectedly out of service after a covered claim.
If you depend on your vehicle daily, this coverage is often a smart and affordable safeguard.