Rental reimbursement coverage: The basics
Last updated: July 2023
Rental reimbursement coverage helps you pay for transportation expenses, such as a rental car or public transportation fare, while your own vehicle is being repaired after a covered insurance claim. It does not apply if your vehicle needs routine maintenance work or if you need to rent a car on vacation.
Rental reimbursement coverage may be called "rental car coverage" or "transportation expense coverage." It's typically an optional coverage on a car insurance policy, which means you need to add it to your policy and pay an extra premium for it.
What does rental reimbursement typically cover?
Rental car reimbursement coverage helps you pay for a rental car, or for alternate transportation — such as bus fare or cab rides — but only if you need it because of a covered loss. When you can use rental reimbursement coverage depends on the other types of coverage you have on your car insurance policy.
For example, if you have collision coverage and you're in a car accident, that is typically considered a covered loss. Your rental reimbursement coverage may help pay for transportation expenses while your vehicle is in the repair shop after the collision.
You can typically choose where to rent a vehicle, but some insurers partner with specific rental car companies. If you rent a vehicle from a company that has an agreement with your insurer, the rental car company may bill the insurance company directly, helping prevent you from paying out of pocket. If your rental company is not in your auto insurance company's network, you'll likely need to pay upfront for the rental car and then request reimbursement from your insurer.
If your car is damaged by hail, you'd need to have comprehensive coverage on your policy for your insurer to help cover the claim. Then, your rental reimbursement coverage may help cover the costs of your alternative transportation while your vehicle is in the shop to repair the hail damage.
Rental reimbursement coverage limits
Your insurance coverage is subject to limits, or the maximum amount your insurer will pay for a covered claim. Rental reimbursement coverage typically has a daily limit, and a maximum number of days it can be used. For example, your coverage may provide up to $30 per day for a maximum of 30 days, until your damaged car is usable again. If the rental car you choose costs more or if you need to use it for longer, you'd have to pay out of pocket for the costs that exceed the limits. Read your policy so you know the limits of your rental reimbursement coverage before you need to use it.
Keep in mind that certain expenses may not be covered by rental reimbursement. For instance, the cost of gas is typically not included in rental reimbursement coverage.
Do you have to pay a deductible for rental car coverage?
Rental reimbursement coverage typically does not have a deductible. But, if you have a covered claim, you'll likely have to pay a deductible on your collision or comprehensive coverage to get your car repaired. The deductible is the amount you pay out of pocket toward a covered claim. You choose your deductible (for example, $500) when you buy coverage.
Have questions about rental reimbursement coverage? Contact your insurance provider today.