Will Insurance Pay for Rental Car During Repairs
Your insurer pays for a rental only if you carry rental reimbursement coverage, and only while your car is being repaired from a covered claim.
It depends on a coverage you have to add yourself
Rental reimbursement isn't automatic. Standard liability, collision, and comprehensive coverage don't include it. You have to add it to your policy, usually for a small amount, and it has to already be on your policy before the accident happens.
If you have it, your insurer will pay for a rental car while yours is in the shop for a covered repair, up to the daily limit and the total number of days your policy sets. If you don't have it, you're paying for the rental yourself, even if the accident wasn't your fault.
Whether the repair is a covered claim
Rental reimbursement only kicks in when the repair itself is covered by your policy. If you're filing a collision or comprehensive claim on your own policy, and you have rental coverage, you're set. If the damage is something your policy doesn't cover at all, like normal wear or a mechanical failure, there's no rental coverage either, because there's no claim for it to attach to.
If another driver caused the accident and it's clearly their fault, their insurer may pay for your rental directly as part of their liability to you. That doesn't depend on whether you have rental reimbursement yourself. It depends on their insurer accepting fault and processing your claim, which can take time. Some people use their own rental coverage to get a car right away and let their insurer sort out reimbursement from the other driver's insurer later.
Check your declarations page for a line that says rental reimbursement or transportation expenses. If it's not there, call your agent and ask what it costs to add it, and whether it only applies going forward or could apply to a claim already in progress.
The daily and total limits on your policy
Even with rental reimbursement, your policy sets a daily dollar limit and a maximum number of days or a total cap. If the rental car you pick costs more per day than your limit, you pay the difference. If repairs take longer than the days your policy covers, you pay for the rest out of pocket.
These limits are set when you buy the coverage, often with a choice between a couple of different levels. A higher daily limit costs more but covers a nicer rental or a longer repair without you making up the gap.
Before you rent, ask your insurer what your specific daily and total limits are, since these aren't the same for everyone and aren't printed in large letters on your policy summary. Ask whether the rental company they work with bills your insurer directly, or whether you pay upfront and get reimbursed.
Questions people ask about this
Does rental reimbursement cost extra on my policy?
Yes, it's an add-on, not something included with liability or collision coverage. The cost depends on your insurer and the daily limit you choose. Ask your agent what the options are and whether raising your limit changes your overall premium by much.
Can I rent any car or does my insurer pick it?
You usually choose the rental car yourself, within your policy's daily limit. Picking a car that costs more per day than your limit means paying the difference yourself. Ask your insurer if they have a preferred rental company where billing goes directly to them instead of you paying upfront.
What if the other driver's insurance is supposed to pay for my rental?
Their insurer typically won't pay until they've accepted fault, which can take days or longer depending on the case. In the meantime, if you have your own rental reimbursement coverage, you can use it and let the insurers settle between themselves afterward. Ask your insurer how that reimbursement process works if it turns out the other driver was at fault.
Does rental reimbursement cover a loaner car from the repair shop?
Some repair shops offer loaner cars instead of you renting from a separate company, and your coverage may still apply depending on how your policy defines a rental. Ask your insurer directly whether a shop loaner qualifies the same way a traditional rental would. The answer depends on your policy's wording, not a general rule.
Will my rates go up if I use rental reimbursement coverage?
Using rental reimbursement itself doesn't raise your rates, since it's a coverage you're paying for and using as intended. What can affect your rates is the underlying claim, like a collision claim, if you were at fault. Ask your insurer how the claim itself, not the rental coverage, might affect your renewal.
See what it would cost to add rental reimbursement before you need it.
Pull out your current policy's declarations page and look for rental reimbursement or transportation expense coverage. If it's not listed, call your agent this week and ask what it costs to add and what the daily and total limits would be. If you're currently dealing with a claim and don't have this coverage, ask your insurer whether the other driver's insurer can be billed directly for a rental instead. Keep any rental receipts and your claim number on hand, since you may need them regardless of whose insurer ends up paying.
