It may surprise you to learn that rental car reimbursement insurance doesn’t just come standard with your auto insurance policy; it’s actually a policy add-on.
By having car insurance rental reimbursement, you won’t have to pay rental car fees if your primary car is temporarily out of commission. But like any add-on, is it worth the increase to your car insurance, or are you better off taking your chances?
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The rule of thumb is that the person responsible for the accident generally pays for the other driver’s rental car — if they have coverage. However, if you’re at fault, your insurance will foot the rental car bill for the other driver as long as you have collision coverage. If not, you’re on the hook for repairing your vehicle as well as rental car fees.
To add car insurance rental reimbursement to your policy, you’ll first need comprehensive and collision coverage. Then you can tack on rental reimbursement coverage on top of that. So, if you’re at fault in an accident and you have comprehensive or collision policies with rental car reimbursement insurance, your rental car will be covered by your insurance while your vehicle is being repaired.Sometimes the fault of a car accident isn’t easy to determine. If you find yourself in this situation, your insurance company will review the police report to figure out who is at fault. Even if the fault is unassigned, you may still rent a car. However, if insurance finds you responsible for the accident and you don’t have rental reimbursement coverage, you’ll have to pay your own rental fees.
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You can absolutely pick the rental company you get your car from! There are two choices: an independent company or an affiliate of your insurance company. The main difference between the two options is your insurance company direct bills an affiliate rental company. If affiliate companies cannot accommodate you, for whatever reason, some independent companies offer discounts if you’re having to rent a car because of an accident.
All insurance products have caps and rental reimbursement coverage is no different. Rental reimbursement coverage has two components: a per claim rate and a daily amount. Your per accident claim rate is either a monetary cap (such as $800) or a day limit (such as 45 days); to find out yours, it’s best to call your provider. Think of the daily amount as your daily car allowance. For instance, if your insurer allows for $30 per day, renting a car above that amount comes out of your pocket.
These rates can often vary significantly. For instance, renting a car in a city is often less expensive, so you can rent the car for longer.
Rental reimbursement coverage is fairly inexpensive and can run you anywhere from $35-$60 annually. When it comes to deciding how much coverage you need, look at your driving habits. If you’re a commuter and driving daily, you’ll want more coverage whereas a weekend driver would need less coverage.
Your coverage will also cost more depending on where you live in relation to affiliate rental companies. In other words, if you live by Rent-A-Car, but your insurer only uses Enterprise, then your rental expense will be greater.
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With so many insurance products on the market, understanding what you truly need can be challenging. If you’re on the fence about rental coverage, then ask yourself this simple question: can you afford to pay for the cost of repairs to your vehicle as well as for the rental?
If you think you can comfortably pay these bills unexpectedly, then you may not need rental reimbursement coverage. Otherwise, you may want to carefully consider how much coverage you’ll need. You can base your decision on how much you drive and how much rental rates are in your area. If you drive frequently, you’ll need more protection and you’ll need greater coverage if you live rurally.
It isn’t mandatory to have rental reimbursement coverage. However, it is an affordable add-on that can save you from paying out-of-pocket for a rental vehicle should you get into an accident.
Rental reimbursement insurance can cost between $35-$60 a year — that’s it! The amount largely depends on your driving habits (whether you commute or drive only on weekends) and rental rates in your area (rural costs are higher than in cities).
Margaret Huntley Margaret Huntley is a creative writing and philosophy student at Western University. She has been working as a freelance writer for over two years and has written about everything from insurance, to poker, to health and wellness for international businesses.
