What is Rental Reimbursement Coverage?
Your auto insurance policy may include the option for rental reimbursement. This doesn’t mean you can rent a car while on vacation and get reimbursement, though. It’s coverage for times when you have to be without your own vehicle due to repairs that your car insurance covers.
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For example, if you were involved in a car accident and your car needs to go into the shop for repairs, you may need to rent a car. If your insurance is covering the repairs on your car, they may also provide you with some form of reimbursement for the cost of renting a vehicle.
This coverage is not required by law and may not be automatically included in your policy. If it’s something you want, you will have to talk to your insurance agent.
How Rental Reimbursement Works
If your car is in the shop due to an accident, weather related damage, or vandalism, you may be able to get some type of reimbursement for the cost of the rental car. You have two ways you can go about it.
- Call your insurance company and find out which rental car companies they work with directly. If you use one of these companies, the car rental agency will likely bill your insurance directly. You do not have to take any cash out of your own pocket as long as you meet the insurance company and car rental agency’s requirements.
- Rent a car from any agency that you want and send in for reimbursement. This method requires you to pay for the fees yourself upfront. You then send the receipts to your insurance company in order for them to reimburse you. They may not reimburse the entire amount of the fees, so make sure you know the limitations of your policy before going this route.
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Most policies have limits. The limits could be per accident or they could be per day. Again, it’s important that you know these limits so that you are aware of just how much the rental might cost you in the end. Don’t just assume that your insurance policy will cover the total cost of the rental.
The good news is that rental reimbursement does not require you to pay any type of deductible. Again, you should know the limitations of the policy so that you know how long you can rent. Some drivers end up taking a smaller or less expensive vehicle as the rental car so that they can maximize the amount of time they can rent the vehicle. This is especially important when the damage on your own vehicle is extensive and will need to spend an extended period of time in the shop.
Keep in mind, though, you will still be responsible for the deductible on your insurance policy for the repairs on your car. Talk with your insurance agent so that you know exactly how much money you will be responsible to cover for the accident. You can then figure this into your budget when determining what type of rental car to take.
Not all policies have rental reimbursement on them. If this is something you think you will use because you don’t have a second vehicle available for use, make sure it’s included in your policy. Discuss the various options with your agent as well so that you don’t overpay for coverage that you don’t need.
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