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.