Car Rental Reimbursement Coverage
When your car is in the shop for repairs following an accident, the last thing you want to worry about is how to get around. That’s where car rental reimbursement coverage steps in. This optional coverage can help cover the cost to rent a vehicle while your car is being repaired, so you can continue your daily life without disruption. But how does car insurance with rental coverage work, and is it something you should consider adding to your policy?
How car rental reimbursement coverage works
When it applies
Reimbursement coverage comes into play if your vehicle is not safe to drive or in the shop being repaired after a covered event, whether you file a claim through your carrier, or the at fault party's carrier. This coverage can also be used for public transportation options like commuter trains, buses.
Requirements
To add this coverage to your policy, you typically need to have collision or other than collision coverage. These are the types of coverage that pay for repairs to your car after covered accidents, weather-related damage or theft. Once you have one or both coverages, you can usually opt for rental reimbursement as an add-on.
Coverage limits
Rental reimbursement isn’t unlimited. Your coverage will likely have a daily limit and total maximum payout, like $20 per day, up to $600 total. If the repairs take longer than expected, and the rental car exceeds the maximum payout, you’ll need to cover the extra cost. Always check your policy for specific limits, as these can vary.
What isn’t covered
- Rental car expenses when your car is in the shop for routine maintenance.
- The cost of a replacement vehicle if your car has a mechanical breakdown.
- If you decide to rent a car for any reason other than repairs for a covered incident, such as a vacation, this coverage won’t apply.
- Costs beyond policy limits: Rental costs that exceed the daily and total limits outlined in your policy are your responsibility.
- Additional expenses: Expenses like gas, mileage or any additional insurance from the rental company aren’t covered under rental reimbursement.
How rental reimbursement differs from rental car insurance
Rental reimbursement coverage and rental car insurance may sound similar, but they are designed for different situations.
Rental reimbursement: Temporary replacement vehicle
Rental reimbursement helps cover the costs of renting a car while your vehicle is being repaired after a covered loss under your auto insurance policy. This typically applies after an accident or an event that’s covered by your other than collision or collision insurance.
For example, if you make a claim after being involved in a fender bender and need a rental car while your vehicle is in the shop being repaired, rental reimbursement coverage can apply. It can help cover the cost of that rental, up to your policy limit, while your car is being worked on.
Rental car insurance: Coverage for rental vehicles
Rental car insurance, on the other hand, is an optional add-on offered by the car rental company that provides coverage in the event of an accident while driving the rental vehicle, usually for an extra fee. This insurance typically covers damage to the rental car, damage to other property, theft of your personal belongings and medical expenses for you or your passengers if you're injured in an accident.
Let’s say you rent a car while on vacation and accidentally hit a mailbox. Your rental car insurance may cover the damages to the rental vehicle and the mailbox, depending on the coverage you purchase.
Common questions about rental reimbursement coverage
No, this coverage doesn’t apply if your car breaks down due to mechanical issues. It’s only applicable when your car is being repaired after an accident or another covered event.
Reimbursement coverage typically doesn’t have restrictions on the type of vehicle you rent. However, if you choose a more expensive car, such as an SUV or a luxury vehicle, you could exceed your coverage limits and may be required to pay the difference out of pocket. When selecting rental reimbursement coverage limits, it's important to consider the cost of the rental car you plan to rent.
In most cases, yes, you can choose any rental car company. Amica has partnerships with Hertz and Enterprise, which can simplify the rental process.
You may not need rental car insurance if your personal auto policy covers rentals, or your credit card offers coverage. However, it can be a good idea if you want to avoid paying a deductible or increased rates on your own policy, don’t have insurance or credit card coverage, or are traveling to a location where your personal policy doesn’t apply. Always check your existing coverage before deciding.
Yes, there are limits. These include the daily rental rate limit and the maximum payout limit. You’ll be responsible for any rental costs exceeding these limits. Additionally, expenses like gas, toll costs and rental company insurance are generally not covered.
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