D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 19, 2021

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Having rental reimbursement may be a wise coverage decision.
id=”attachment_11620″ align=”aligncenter” width=”530″ caption=”Having rental reimbursement may be a wise coverage decision. (image by Ford.com)”

While we normally discuss car insurance add-ons as a group, from time to time, we’ll single out an individual insurance policy add on. Add ons are extra coverages that go beyond the basics of liability, collision, or comprehensive coverage.  At CarInsurance.org, we’re convinced that an informed auto insurance consumer will be able to get the coverages that are exactly what they need.

Add-on coverages, like rental reimbursement insurance, may make sense for you and your specific needs.

At the end of this article, you will be well-equipped to decide if this add-on coverage is right for you from both a coverage perspective and a financial perspective.

Those who have read our resources have heard us talk about rental car insurance on occasion. Rental reimbursement insurance coverage is completely different. Rental car insurance refers to your actual coverages in terms of the liability, collision, and comprehensive portions of your policy, as well as the various non-insurance products offered by a car rental company.

What is rental reimbursement insurance coverage?

Car rental reimbursement is, of course, an add-on to an auto policy. In insurance lingo, that’s something referred to as an insurance rider. A rider is just a purchased addition to a basic auto policy that expands the coverages of someone who purchased a policy. Riders are relegated to coverages that are not typically sold as stand-alone products. One must have an auto policy to which the rider is attached.

Rental reimbursement insurance does what it sounds like. It provides you with coverage that ensures in the event your car is damaged or stolen, you won’t be out of pocket for a rental car during repairs or a period in which you can get a new car. If you’re involved in an accident where your comprehensive or collision coverage pays out and you carry this type of coverage, your auto insurance company will issue you a rental car to drive while your car is being repaired up to the limits on the policy. Most insurers will even bring the rental to you at your home or place of business. If your car is stolen, your insurer will offer you a rental for a set period of time, either until your vehicle is recovered or your coverage runs out. Generally, this is a maximum of 30 days.

The rental car company is given a limit, typically $30-$50 per day. If you want a bigger car or other extras, you would need to pay for those. You don’t need to buy the car rental company’s insurance, though. Again, your insurance will cover your liability while you’re driving the rental.

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When should you get rental reimbursement coverage?

Here’s a scenario in which you’d want rental reimbursement: You’ve been involved in an accident that has rendered your car inoperable – it cannot be driven. Your insurer has deemed the automobile repairable, although there are significant body and mechanical damage that will require multiple days to fix. Even worse, the repair shop you want to perform the repairs has a significant backlog of over a week before they can even begin to get started on your car.

So you’re going to have to get a rental vehicle until yours is repaired, which likely will be two weeks minimum. The cheapest car rental company offers a sub-compact model for $15.99 per day, not counting your state’s tax or other fees that may be imposed. Plus, you’re used to driving a larger car, and one comparable to that will be $24.99 per day, plus taxes and fees.

The cheapest option will cost you $223.86 plus taxes and fees over the time your car is being repaired. The option most like the car you currently drive will cost you $349.86 plus taxes and fees. Add these totals to the deductible amount you’re likely out, and suddenly, you could be looking at a significant outlay of cash in a short period of time that you might not have budgeted for.

Even without the extended period of time offered in our example above, it’s important to keep in mind that rental car reimbursement is normally a low-cost additional coverage, usually costing less than $30.00 over the course of a year on an auto policy. Actual rental car reimbursement riders will vary depending upon which company your auto insurance policy is with. They’re normally low-cost additions to a policy, and often are available with different levels of coverage which are priced by the amount of coverage your rental reimbursement provides (daily and total amounts) for each time it is used.

Our example does give some idea of how adding a rider for rental car reimbursement can pay off for policyholders. Due to the low-cost packages most auto insurers provide, we do believe rental car reimbursement coverage can benefit many drivers.

For many drivers who have always had rental reimbursement coverage, it seems second nature. Why would you not opt in? With many larger companies, it could be as little as $15-$20 per enrollment period. If you’re looking for ways to lower your premium, things like increasing your deductible would go a lot further. If you feel you don’t need it, though, it’s a completely optional coverage.

If you do obtain a quote on a new policy or are planning on renewing your current policy, be sure to inquire about the types of rental car coverage the insurer offers. The rider may be offered as part of a package with other riders, so be sure to ask about any discount packages that may be available as well.

Who Provides Affordable Rates for Great Auto Insurance?

If you’re looking for a reliable personal auto insurance policy, you have plenty of options. You can choose between large national companies and small local providers. It starts with entering your zip code into our quote calculator. Then you’ll need to answer a few questions, and we can generate multiple quotes for you.