If My Car Breaks Down, Will Insurance Cover a Rental?

If My Car Breaks Down, Will Insurance Cover a Rental?

A car rental can be helpful while yours is in the shop following an accident or when your clunking transmission is fixed. There might be several unexpected circumstances in which you need a rental car, but most basic auto policies don’t cover the cost, even if the accident is covered.

However, you can include rental car reimbursement coverage as part of your auto insurance policy in many cases. Renting a car won’t always be covered, but it could provide enough benefit to make the relatively modest additional cost worthwhile. Let’s explore how and when auto insurance coverage can help below.

If My Car Breaks Down, Will Insurance Cover A Rental?

Car insurance does not cover the cost of a rental automobile if your car breaks down. On the other hand, Rental reimbursement coverage helps cover the cost of a rental auto or substitute mode of transportation after a covered claim. In addition, if you need a car while yours is being repaired, this coverage can help you pay for other forms of transportation such as bus and train tickets while your car is being repaired. This extra policy, often known as rental car coverage, usually has limits.

Rental Reimbursement Coverage

If your automobile is in the shop due to a covered loss, rental reimbursement coverage, also known as alternative transportation coverage or car rental expense coverage, can help you pay for transportation expenditures. This could include public transit or a rental car while yours is being repaired.

Examine a copy of your policy or contact your insurance company to see what risks it covers and what it doesn’t. However, if your policy includes rental reimbursement coverage, insurance will typically cover the cost of a rental automobile if your car is out of service due to:

  • A collision with another vehicle
  • An accident involving a single vehicle, rolling over, sliding off the road
  • Extreme weather damage, such as hail or wind
  • Animal-related damage, such as a mouse infestation or running over a deer while driving
  • The damage caused by falling objects
  • Smoke or fire damage
  • Theft
  • Vandalism

Rental Reimbursement Does Not Cover

Your rental reimbursement coverage may not cover all your rental expenses in some cases, such as:

  • Breakdowns Due To Wear And Tear
  • Changing the oil
  • Failure of the engine or transmission
  • Renting a car while on vacation

Rental reimbursement coverage provides coverage for your rental if you include it in your policy and then suffer a covered loss. However, it has limitations, so policyholders should not expect it to cover all rental scenarios.

Related Article: The Exclusive Guide to Auto Insurance for Veterans

How Does Rental Reimbursement Insurance Work?

Rental reimbursement coverage will cover transportation costs such as a rental car or public transit if your vehicle is repaired as part of an accident insurance claim. Only after you have comprehensive and collision coverage can you add this sort of coverage. Consider these factors when it comes to rental reimbursement car insurance:

  • Some auto insurance providers may cover non-rental car transportation costs. Other modes of transportation, such as Uber, city buses, light rail, and commuter trains, may be covered if you don’t rent a car.
  • A deductible usually is not included in rental reimbursement insurance. That implies the amount of your deductible will not reduce your claims check. However, to get your automobile fixed, you’ll have to pay a deductible on your collision and comprehensive coverage.
  • Some insurance companies may have joint ventures with rental companies. This means your insurance provider will be billed directly by the rental business. If you rent from a different firm, you may have to pay the charges upfront and then have your insurance reimburse you.
  • Rental reimbursement coverage frequently qualifies for discounts. A multi-car discount, for example, can be applied to rental reimbursement coverage.
  • Rental reimbursement or loss of use coverage, like all other types of motor insurance coverage, has limits. These are usually mentioned as a per-day and per-incident cap in your policy. For example, you could collect $30 per day up to $900 in total.
  • Whether you have a single automobile or numerous vehicles insured on the same policy, rental reimbursement coverage is per vehicle.

Cost Of Rental Reimbursement Coverage

Rental car reimbursement is usually an extra $35–$60 per year ($2–$5 per month) on top of your automobile insurance policy’s comprehensive/collision coverage.

While rental car reimbursement coverage varies depending on the provider, it usually is relatively affordable. Even one time after a covered loss, it will typically be less expensive than renting a car out of pocket. Insurance experts often recommend the coverage since it will save you money if your automobile is destroyed in a covered event.

Related:How to File a Car Insurance Claim

Example of what the cost of rental reimbursement coverage might be for a 30-year-old man living in Indiana.

Company Reimbursement Coverage Est. Monthly Rate
State Farm $25/day ($600 max per incident) $1.36
$50/day ($1,200 max per incident) $2.68
80% of the rental cost/per day ($1,500 max per incident) $1.55
Geico $30/day and ($900 max per incident) $2.35
$50/day and ($1,500 max per incident) $3.93
Esurance $30/day ($900 max per incident) $3.91
$40/day ($1,200 max per incident) $5.10
Nationwide $30/day ($900 max per incident) $3.45
$40/day ($1,200 max per incident) $4.93
$50/day ($1,500 max per incident) $6.48
$60/day ($1,800 max per incident) $8.00
$75/day ($2,250 max per incident) $10.47

Note: This is an average premium for a driver with a moderate driving history. It may vary from your actual premium. Compare rates from several insurance providers before purchasing your policy.

Your comprehensive and collision coverages pay for repairs to a car that looks identical to yours. However, if you’re renting a high-priced vehicle, such as a convertible or a luxury automobile, your insurance may not cover the entire cost of repairs.

When renting an SUV, the cost will be higher for drivers used to luxury vehicles or families that need more room. These drivers should consider purchasing additional insurance. Hiring an SUV in some cities, such as New York City, can cost more than twice as much as renting an economy car.

Location Economy Mid-Size SUV
New York, NY $50-78 $79-177
Chicago, IL $37-46 $54-90
Orlando, FL $28-37 $63-74
Witchita, KS $34-55 $51-88
Los Angeles, CA $25-32 $50-89
Columbus, OH $34-48 $55-72

*Source: ValuePenguine.com

What Other Options Do I Have?

Understanding your options is essential before you get rental car insurance. Common types of coverage include:

  1. Loss/collision damage waiver: This form of coverage protects you against theft, accidental damage, or vandalism when you rent a car.
  2. Liability/supplemental liability insurance: Insurance coverage for damage to other vehicles or property caused by you while driving the rental car. In addition, it can cover medical costs for the other driver and their passengers if you are at fault in the accident.
  3. Personal accident insurance: Pays for your and your passenger’s medical bills if you crash while driving a rental car.
  4. Personal effects coverage: It covers you against personal items being stolen or damaged in a rental car.

Also Read: Veteran Auto Loans: What Are Your Options?

Save on Rental Car Costs

If you’re stranded without a car due to someone else’s negligence, their liability insurance should cover the cost of a rental automobile. A reasonable replacement may be covered under this policy in most cases, meaning it may cover a vehicle that looks similar to yours. And, in most cases, the at-fault driver’s policy will provide rental car coverage until your car is fixed or if your vehicle was totaled until it is paid in full.

Roadside Assistance 

Roadside assistance can offer you emergency services when you’re stranded on the side of the road and can provide robust coverage that includes:

  • Jump Start
  • Flat Tire Repair
  • Limited Towing
  • Locked Out
  • Winching
  • Fuel Delivery

If you have collision and comprehensive coverage, your policy may include roadside assistance; if it doesn’t, it’s relatively inexpensive and straightforward to add.

Should You Get Rental Reimbursement Coverage?

When deciding whether or not to acquire rental reimbursement coverage, each individual must examine various factors. To start with, you’ll need to determine whether you can afford to fix your car and rent another one. Rental car prices can mount quickly, and you never know how long it will take to repair the vehicle. It could take many weeks. If you can’t afford to add reimbursement coverage to your policy, consider adding just a few dollars a month to protect against future repair expenses.

For only a few dollars per month, a vehicle owner can significantly reduce the cost of a rental car (especially if they require it for an extended period). Even if the daily limit isn’t enough to cover the cost of a rental automobile, a policyholder who has coverage may end up paying substantially less.

Wrapping Up

Finally, make a quick call to your insurance agent. They can go through your current coverage with you and propose any extra rental coverages you might want to consider. For a modest price, they may be able to add an endorsement to your policy that enhances your rental car coverage.

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