Rental Car Coverage: Everything You Need To Know
Rental car insurance has gained popularity recently. Even though this does not come under the state’s minimum liability coverage, drivers are adding it to their policy. If you are also planning to add rental car insurance coverage then you are at the right place.
This blog has covered everything you need to know before adding rental reimbursement insurance to your existing policy. Let’s start with a quick introduction:
What is Rental Car Insurance?
Rental reimbursement can be defined as an optional car insurance coverage that will cover the cost of renting a car while your original car is under repair. The accident can be your fault or another driver’s fault but you will get the coverage.
Till the time your car is getting repaired, you can rent another car and ask for the reimbursement of the cost of renting. Your insurance company will either provide you the claim money directly or will send the bill to the other driver’s insurance carrier.
What is covered in Rental Car Coverage?
The coverage depends majorly on your carrier. There are some companies that provide end-to-end coverage; you will get rental coverage in all situations. But there are some other companies that provide rental coverage only when the car gets into an accident. In most cases, there are few things that every insurance company covers:
Rental reimbursement is not limited to renting a car only; it also includes the fare of the bus or cab you are taking. Sometimes the insurance company only provides options for transportation expense coverage. That means; your insurance carrier will only pay the fare of public transportation and not car rental.
As a result; to avoid any confusion or miscommunication, always clear the deliverable of the company in advance.
What is rental car insurance not covered?
One more frequently asked question is; what will not be covered in a car rental reimbursement. Some scenarios are not covered even if you might be thinking the other way.
- One of the similar scenarios is; when you have given your car under maintenance. We all leave our car for monthly routine maintenance. This is always a preplanned situation; your insurance company is not liable to pay for rental car coverage.
- Another one is; when you are out or on vacation or any retreat activity. You can not ask your insurance carrier to pay for the car rentals or travel fare.
How does rental reimbursement insurance work?
All the drivers have the freedom to choose their rental service. The insurance companies have their own affiliated car rental companies; you can either select those or you can go for your preference.
- The benefit of selecting an affiliated rental company is the convenient process. You don’t have to get into the middle of filing claims and asking for reimbursement. The rental company will directly send the bill to the insurance company and they will settle it on their own.
- But if you are selecting your own rental company then you will have to claim for reimbursement on your own. You will be required to keep all the bills and tickets safe and then attach them with the claim. Once you file the claim; the agents from the insurance company will investigate the claim. You will get the reimbursement only after the company accepts the claim and processes it.
- If the company rejects the claim then you will have to file the claim again with the new information that is required.
- Another important aspect that plays an important role in the reimbursement is the daily limit with per claim limit. Every company has its rental reimbursement package and the drivers are required to follow that.
- Let’s say your company has a $45 per day and $1000 per accident rental reimbursement package. So you will have to make sure not to rent a car for more than $45 per day.
- Or if you know that your car will be ready in 10 days then you can rent a high-end car at $100 because your per accident value is $1000.
Do I need rental car reimbursement coverage and if so, how much?
Rental reimbursement coverage is optional no doubt; there is no need for it. But adding it to your coverage will end up in your profit. Getting into an accident is not in our hands; sometimes we get into an accident because of another driver. In such situations; you will have to give your car in repair.
This is a common phenomenon. It can happen once or twice a year easily. Hence; till the time your car is in repair you need another vehicle to travel to your office or even grocery store. In such situations, you will have to pay the rent of another car from your pocket. But with rental car coverage, your insurance company will bear the cost of renting another car.
Now, another question that arises is; how much should you pay for rental car reimbursement insurance?
There are a lot of factors that will affect car rental insurance cost for any driver. One of the most major factors is the state, area, or city you live in. The insurance company is going to calculate the cost of rental car reimbursement as per the cost of car rentals in your area. If the average car renting cost in your city is more than $40 per month then you are going to get higher rental reimbursement coverage. Hence you will have to pay a higher premium for the coverage.
Similarly, if you live in suburban areas or towns then the car renting cost might be $20 per day. As a result; you will get lower car premium rates.
So the first thing you have to do is to check the average car renting cost in your city or town and then make the decision. Following is the list of car rental costs in some of the most popular cities in our country. This will help you to get an approximate idea of how much you might have to pay as the premium:
|Location||Economy Car||Mid-Size SUV|
|Los Angeles, CA||$29-42||$53-84|
|New York, NY||$48-75||$71-163|
Get your free insurance quote from top carriers.
How much is the cost of rental car insurance?
Yes, we know you must be wondering how much premium you will have to pay for rental reimbursement coverage. As explained above, every company has its method of calculating the premium.
To help you understand we have the list of top companies in almost all the states with their types of reimbursement coverage. You can also check the estimated monthly rate of that company.
|Car Insurance Company||Reimbursement Coverage Limit By The Company||Estimated Monthly Rate|
|Esurance||$30/day ($900 max per incident)||$3.76|
|$40/day ($1,200 max per incident)||$5.14|
|State Farm||$25/day ($600 max per incident)||$1.48|
|$50/day ($1,200 max per incident)||$2.17|
|Nationwide||$30/day ($900 max per incident)||$3.72|
|$40/day ($1,200 max per incident)||$4.84|
|$50/day ($1,500 max per incident)||$6.71|
|$60/day ($1,800 max per incident)||$8.12|
|$75/day ($2,250 max per incident)||$10.56|
|Geico||$30/day and ($900 max per incident)||$2.41|
|$50/day and ($1,500 max per incident)||$3.56|
Please note: This is the average cost of car insurance for an average driver profile. This might change your profile. Make sure to get quotes from different companies before buying your policy
Rental Car Insurance Coverage FAQ
Do I have to pay a deductible for rental reimbursement?
Generally, there are no deductibles in rental car reimbursement. But it depends on your insurance carrier, some insurance companies include a deductible, and some not. Always read your policy before making the final payment.
Should I seek rental car insurance from my insurer or the other driver?
If you are at fault for the accident then you will have to get in touch with your company to file the claim. Or if the other driver was at fault then you will have to file a claim with their insurance company. They will pay for your rental car insurance.
What is the process to get rental reimbursement from an at-fault driver’s insurer?
You will have to get a police report first of all. This will help to validate the claim. And don’t forget to get the contact and insurance information of the other driver. Then document the entire accident and attach photographs of the damage. And then file the claim directly to the other driver’s insurance company.
How can I get rental car insurance if I am at fault or have non-collision damage?
Almost all the insurance companies include rental reimbursement for at-fault as well as non-collision damage. All you have to do is ask the terms of rental car coverage clearly before buying the policy. As a result; after the accident, you just have to inform your insurance company and they will initiate the process.
Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.