If you get in a car accident and your car gets damaged, you are probably going to need something to get you from Point A to Point B. Rental Reimbursement Coverage is the insurance that covers any transportation expenses while your car is in the shop. It should be noted that this type of coverage is only for accidents and does not apply to:
- Routine maintenance visits.
- Renting a car for vacation.
Additionally, it is important to note that rental reimbursement coverage is not the same as the insurance that covers you while driving a rental car. Rental reimbursement coverage is otherwise known as “rental car coverage” or “transportation expense coverage.” It is usually not a mandatory type of coverage, which means that if you would like to include it in your policy, you will need to pay an extra premium for it.
The Benefits Of Having Rental Reimbursement Coverage
If your car gets damaged in an accident and needs to be in the shop for a few days, your rental reimbursement coverage will pick up the tab for alternate transportation services. To be clear, this type of coverage will not only pay for rental cars, but can also cover bus fares or cab rides, as well. Keep in mind, however, that this is only if you have suffered a loss that is covered in your insurance policy.
For instance, if you have collision coverage and your car becomes impaired due to a traffic collision, that would be deemed a “covered loss.” Your rental reimbursement coverage will likely shell out the cash for your transportation costs while your car is being worked on.
Conversely, let’s say that your car gets damaged during a natural disaster. In order to have your transportation costs paid for, you would need to have comprehensive coverage on your policy.
Since its quite common for drivers to either sign a lease agreement for a car or finance a car loan, most people will already have collision coverage and comprehensive coverage included on their policy. This is because these two types of insurance coverages are usually required for leases and car loans.
A lot of times, insurance companies will have partnerships with car rental companies. Typically, if a policyholder rents from a company that has a partnership with their insurance company, the rental car company will directly bill the insurance company.
If you don’t want to use a rental car company that is in-network with your insurer, then be prepared to pay for your transportation costs out of pocket, at least initially. To get the expenses covered, you will then have to request a reimbursement from your insurance company.
Rental Reimbursement Coverage Limits
While it does come in handy in an emergency, even rental reimbursement insurance has its limits. More often than not, your insurance company will put a cap on the maximum amount of money they are willing to pay for an eligible claim. Because car repairs can be a tricky process, rental reimbursement insurance will usually abide by a daily limit along with a maximum amount of days that you can use it.
For example, your insurance company might offer a $40 per day limit for a rental car for a maximum of 30 days. If you select a rental car that costs more than $40 per day, then you would need to pay the remaining balance. The same rules apply if you were to need the rental car for longer than the allotted 30-day period. This is why it is so important to make yourself aware of your insurance policy so that you know the limits of your rental reimbursement coverage, before having to use it.
Is There A Deductible For Rental Car Coverage
As far as transportation costs go, you usually do not have to pay a deductible for rental reimbursement coverage. However, if you your car was damaged and you have a covered claim, you will most likely have to pay a deductible to get your car repaired through collision or comprehensive coverage. A deductible is the portion that you are responsible for paying out of pocket in the event of an eligible claim. When you sign up for coverage through your insurance company, you decide how much your deductible will be.
While rental reimbursement coverage may be an add-on to your policy, accidents do happen and it’s wise to be prepared. If it’s something you think you might want before hitting the road, be sure to talk to an agent and compare rates.