Imagine: You’re heading into work late Monday morning, coffee in one hand, and suddenly, a fender bender flips your entire week upside down. The next thing you know, you’re sitting at a car repair shop, taking work calls while you see the costs piling up.
Car repairs aren’t quick. They can take anywhere from 20-30 days because of part shortages or backlogs at repair shops. That’s almost a month without a car and a coverage plan.
And rentals? They aren’t cheap anymore. A per-day rental in Chicago is anywhere from $50-$75/day, with slightly higher rates at airports or during peak times. This can be a hefty price for a temporary solution, knowing you also have to pay for whatever the repairs cost, there must be.
But here’s why people prefer rental reimbursement coverage. For a few extra dollars for a month, sometimes even less than how much you spend on groceries, you can ensure you won’t be left without a ride if your car is involved in an accident, whether it’s your fault or not.
Some might look at it as a convenient option, but in short, it’s a smart way to be prepared for unexpected situations in life that can happen anytime. Rental reimbursement coverage prevents you from being stuck in situations and stressed when you need your car the most.
Using Rental Reimbursement Coverage After an Accident
Rental reimbursement coverage is exactly what it sounds like: a small addition to your auto insurance. It’s a backup plan that covers the cost of a rental car, a bus, or a rideshare when your car is being repaired in the shop after an accident.
However, its eligibility depends on the type of coverage you have. Mentioned below are the steps for using rental reimbursement coverage.
You File Your Claim
Right after the accident happens, check with your insurance company if the accident is covered. If it is, then you’re eligible for reimbursement coverage.
You Get A Rental Car (Or Ride)
Most insurance companies, like Geico or Progressive, work directly with rental companies. This makes it easier to drive off without any delays. If you choose your own rental company, you will just have to save your receipts to get reimbursed later. Some insurers will even let you use rideshares, buses, or trains.
Check The Difference
Check the daily limit on your coverage policy. If you pick a car that costs more than your daily limit, you will have to pay the difference.
Return The Rental When Your Car Is Ready
And that’s it. When your car is completely repaired, you can return the rental.
Cost vs Benefit
We get it, no one likes adding extra costs to their insurance, especially for something that you hope you will never need. According to the Isaacs and Isaacs personal injury lawyers, an average driver in the U.S. is involved in a car accident every 17.9 years, which means most people will experience three to four accidents in their lives.
You might say, “I’m a safe driver,” but in reality, accidents caused by others can also disrupt your routine. If you don’t have a spare car at home, getting rental insurance coverage is the best backup plan in this economy.
Listed below is a breakdown of what rental reimbursement insurance covers and how it can help you save money, especially after an accident.
What Rental Reimbursement Insurance Covers
The cost to rent a car is $50-$80/day on average. Let’s assume your car repairs need two to three weeks, you can easily end up paying $1000 to just keep your life moving.
That’s a big dent in your wallet, especially when you’re already dealing with the repair costs and stress of the recent accident.
A Quick Cost Comparison
Let’s assume you’re paying $60 a year for rental reimbursement and your policy covers $40 a day. If you need a rental even for 10 days, that’s $400 worth of coverage. This calculation saves you hundreds of dollars on what you’d normally spend on one or two dinners out each month.
Details & Limitations
Rental reimbursement is a huge help when you’re left without your car. However, it’s not a “rent-anytime” benefit. Below is a clear breakdown to help you understand what’s covered and what’s not.
Included
- Daily and overall caps: Many policies will cover your rental up to $30–$100 per day, but a total cap, usually around $900-$300 per claim or about 30 days, whichever limit you reach first.
- Alternate commute option: Most insurers would also allow you to use rideshares, taxis, buses, or trains.
- Direct billing: If you rent your car from a preferred car rental agency, the insurer may bill them directly so you don’t have to pay upfront. If the value of the rental is higher, you might have to pay the difference.
Excluded
- No leisure trips: You can’t use this coverage for vacations or while your car is in for routine maintenance. It only applies to covered claims like accidents, theft, vandalism, or weather damage.
- Extras Are Extracts: Gas, mileage overages, security deposits, and upgrades are not included.
- Mileage limits apply: Some rentals put a cap on how far you can drive before charging additional fees that you will have to pay out of your own pocket.
Choosing the Right Rental Car Reimbursement Coverage
Choosing the right rental reimbursement coverage would require you to match the policy that suits your needs. This can be different depending on the type of vehicle you drive or the area you live in. Listed below are some of the options to help you choose the right coverage.
Pick the Coverage Limit
Insurers offer daily reimbursement options between $30-$100, depending on your provider and region.
Set a Maximum Duration That Fits
If your local collision centers are slow or you live in a busy city, you should consider getting a higher cap to avoid hitting limits on mind-repair.
Look for Alternate Transportation Expenses
For some people, car rental wouldn’t be a convenient option. If you think buses, taxis, or rideshares would fulfill your needs, add them to your plan.
Consider Backup Services or Plans
If you have a spare vehicle or you are a sole driver, do you still need the highest daily limit? Adjust accordingly and select the policy that best suits your needs.
Compare Insurers for Best Options
If you have auto insurance, you’re eligible to get a rental reimbursement coverage plan. However, not all rental reimbursement plans are the same; they’re designed to fit different needs and scenarios. Listed below are tiered options to consider when choosing rental reimbursement options.
Why Tiers Matter
Most major insurers in the US, such as State Farm, GEICO, Progressive, and Allstate, offer tiered rental reimbursement options. This allows you to select different daily limits and total coverage caps.
For example:
- Geico offers flexibility starting from $30 to $50/day and total claim caps from $900 up to $1,500. You can choose to pay more per month and increase the daily rate.
- Progressive offers tiers starting from $40-$60/day, covering rentals up to 30 days, which is the standard. PerkShare®, a bonus offered by Progressive, allows you discounts with rental partners.
- State Farm coverage usually starts low, from $16/day (basic) to $50/day (premium). The claim caps typically range from $600 to $1,200, depending on the state and selected policy.
- Allstate offers tiers that usually range from $30 to $50/day, with a 30-day or $900-$1,500 cap per incident. Coverage is optional, and you can choose to use preferred rental shops for direct billing or save receipts for reimbursement.
Choosing the Tier That Fits
- If a basic local rental costs $60/day, choosing a 30/day tire leaves you covering half the cost.
- If you don’t want to cover costs upfront, look for an insurer that offers direct billing with rental partners such as Enterprise, Hertz, and Budget.
- You can always select a basic tier and upgrade it for just $2-$10 per month, depending on the insurer and the tier you selected.
Example
Let’s assume Sarah accidentally hit her car on her way home from work. The body shop told her it would take 15 days to complete repairs.
She had a 40/day rental reimbursement tier with a max of 30/day. Here’s what happened.
Outcome:
- Rental cost: 15 days × $60/day = $900
- Coverage paid: 15 days × $40/day = $600
- Paid out-of-pocket: $300
Without rental reimbursement, Sarah would have to pay $900 out of pocket for the rental vehicle because her car was in the shop. Since her rental cost $60/day but her coverage only paid $40/day, she had to cover the difference herself.
Avoid These Mistakes
Most people misunderstand how rental reimbursement works, which can lead to confusion and a bad experience. Let’s clear up the confusion with real facts.
- Rental reimbursement only covers a rental if your car is undrivable after a covered accident or incident, including theft, vandalism, or weather damage. It won’t cover rentals during routine maintenance, breakdowns, or vacations.
- Many insurers require you to get pre-approval before renting a car to confirm your claim qualifies and to guide you to your preferred rental partners. Skipping this step could leave you to cover the entire bill.
- Whether the accident was your fault or not, it does not affect your rental reimbursements. As long as your claim is approved under your coverage tier, you can use your rental benefits.
- You don’t need to wait for the fault to be sorted out before getting a rental. Your insurer can advance payment for your rental while the investigation is ongoing.
What’s Missing in Your Car Insurance
Rental reimbursement does not automatically come with your auto insurance policy, even if you have full coverage auto insurance.
Full auto coverage means you have liability insurance, collision, and comprehensive coverage. It does not include rental reimbursement by default. If you want your insurance to pay for a rental car when your vehicle is being repaired, you must add rental reimbursement as an optional add-on (rider) to your policy.
What Happens If the Fault Is Contested
Accidents happen, and sometimes it’s clear who’s at fault, but not always. When you get into a car accident, the other driver’s insurance can dispute who was actually at fault. The claim investigation could stretch for days and even weeks.
Fortunately, with rental reimbursement on your policy, you don’t have to wait for the insurance companies to decide who’s at fault before getting a rental. In other words, you can get your rental immediately after your claim is approved.
Listed below are helpful ways to make the most out of your rental reimbursement coverage.
Tips & Best Practices
You’ve learned what rental reimbursement coverage is, what it costs, and if it’s worth adding to your auto insurance policy. Now, here are practical tips to assist you.
Keep Your Policy Details Handy
Store your policy number, claim number, or your insurer’s claims contact in your glove compartment.
Call Before Renting
Many insurers require pre-authorization before you get a rental. Calling ahead will ensure you double-check your daily limit and confirm if your claim qualifies for rental reimbursement.
Choose a Car Comparable to Yours
Your insurer expects you to choose a rental similar to your vehicle. If you opt for a luxury car, you may only get partial reimbursement and will have to cover the extra cost yourself.
Save Your Receipts and Rental Information
Even if your insurer directly bills the rental company, keep all the receipts, including rental agreements, gas receipts, and additional fees paid.
Know When to Return the Vehicle (and More)
Your coverage continues until your car is repaired or until you hit your daily or total coverage limit. It’s the best policy to double-check with your provider to avoid paying out-of-pocket beyond your coverage.
Have a Question? Insurance Navy Can Help
Accidents happen, but getting a rental while your car’s in the shop shouldn’t add to your stress. At Insurance Navy, we make rental reimbursement coverage simple, clear, and affordable.
Don’t get caught without a ride when you need it most. Call 888-949-NAVY or get a quick quote online today. The Insurance Navy is here to keep you moving, no matter what.
