What is Rental Reimbursement Coverage?

Rental reimbursement is a coverage option that provides temporary means of transportation following a covered loss.

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Rental reimbursement is a popular coverage option offered by most car insurance companies as a supplement to an auto policy. Whether or not you’re at-fault in an accident, this coverage ensures you’re not stranded without a ride if your own car is rendered undrivable.

A claim must precede your rental reimbursement coverage, meaning you must file a claim before you can get coverage for a rental car. For more information on whether or not car insurance covers rental car expenses without a claim, visit our guide to rental car insurance

Continue reading to learn more about how rental reimbursement coverage works, along with a comparison of popular insurance companies’ rental car programs.

A guide to rental coverage in auto insurance — table of contents:
  1. What is rental reimbursement coverage?
  2. How does rental reimbursement coverage work?
  3. Rental reimbursement coverage from top insurance companies
  4. Is rental reimbursement coverage worth it?

 


 

Rental reimbursement coverage defined

Rental reimbursement coverage pays for temporary use of a rental vehicle to ensure you have transportation after a covered loss and subsequent claim. Insurance companies set limits on how long you may drive the rental car — typically per day and claim — while your own vehicle is being repaired. To obtain rental reimbursement coverage, you must first carry collision and comprehensive coverages on your car insurance policy.

This insurance coverage follows a comprehensive or collision claim. It’s important to remember that rental reimbursement never covers a rental car used for leisure or while your own is undergoing routine maintenance.

 

What does rental reimbursement cover?

If you need to use this coverage, the insurance company will provide a rental vehicle of like kind and model as long as the cost is agreeable with what your policy is willing to pay. If your SUV is being repaired, expect a similar make and model. Policyholders can typically choose any rental car agency but most insurance companies have affiliate partnerships with specific rental companies; this allows for a more seamless process so that you don’t have to file for a reimbursement. Simply pick up and drop off the rental car within the time period specified on your policy.

You will be held responsible for the cost of gas and any deposits or fees charged by the rental car company for the duration of your rental period. If you select a rental agency of your choice, confirm that the daily rate is at or below your policy's rental reimbursement limit — when you file for reimbursement, this will be the maximum amount your insurer will reimburse, no matter the total cost of a rental car.

 


 

How rental reimbursement coverage works

How the claims process plays out when a rental car is needed after a car accident is typically fairly straightforward. Keep in mind your experience may vary depending on the circumstances of the claim.

If you’re at-fault

  1. File a claim with your insurance company to use your collision coverage.
  2. Get an estimate at a local mechanic or insurer-affiliated collision center.
  3. Drop off your vehicle and pick up the rental car.
  4. Return the rental when your car is repaired or you meet the coverage limit — whichever comes first.

If you’re not at-fault

  1. File a claim with the at-fault driver’s insurance company; if the other party is slow to respond, there are delays, or if you need an immediate rental vehicle, you may need to file a claim with your own insurance provider instead.
  2. Get an estimate at a local mechanic or insurer-affiliated collision center.
  3. Drop off your vehicle and pick up the rental car; save any receipts and documents provided by the car rental company.
  4. Return the rental when your car is repaired or you meet the coverage limit — whichever comes first.
  5. Submit a claim for reimbursement, if required by the insurance company.

 


 

Where to get rental car reimbursement coverage

Though it’s optional, rental reimbursement can be found at most insurance companies as it’s a popular coverage. When you finalize your auto insurance policy, you’ll have the opportunity to choose the daily limit allotted for rental car coverage.

Below are common limits from some top insurance providers.

Insurance CompanyRental Reimbursement Maximum
Allstate$30-$100 per day
GEICO$35-$50 per day, $1,051-$1,501 per claim
Liberty Mutual$30 per day
Nationwide$30-$500 per day, $900-$7,500 per claim
Progressive$30-$60 per day, $900-$1,800 per claim
State Farm$25-$50 or 80% per day, $600-$1,500 per claim

It is difficult to calculate exactly how much extra you’ll pay for rental reimbursement — every insurance company is different — but the coverage typically adds between $2 and $15 per month to your premium.

 


 

Do you need rental car coverage?

For those who can afford the extra premium to have rental car coverage, it’s a great way to get the most out of your insurance for extra peace of mind during the oft-stressful claims process. But if you’re wondering if this optional coverage is worth it, there are a few questions to think about:

  • How reliant are you on your vehicle? If you have quite the busy schedule in which a car is integral in your daily routine — for instance, chauffeuring your children around — being without a vehicle would throw a wrench in your lifestyle. Rental reimbursement may come in handy especially if you drive often, which increases your chances of getting into an accident.
  • How expensive are rental cars in your area? The cost of car rental varies by location. Rental reimbursement may not be worth it if it’s cheap to rent a car on your own, or if you can get by using rideshare services.
  • Do you have access to adequate public transportation? If you can commute to work via public transportation, rental reimbursement may seem unnecessary. However, public transportation expenses are often included as part of this coverage.

Above all, additional coverage like rental reimbursement should be affordable for your financial situation. If you’re unhappy with what you’re paying for auto insurance, shopping around and comparing quotes are your best bet in finding a cheaper rate. Enter your ZIP code below and let The Zebra guide you to savings.

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Kristine Lee LinkedIn

Kristine is a licensed insurance agent and one of The Zebra’s in-house content strategists. With a background in copywriting, she covers the ins and outs of the home and car insurance industries. She has been a contributor to numerous publications focused on the nuances of insurance, including BestCompany.com.