Does auto insurance cover rental cars? (2025 Coverage Guide)
Your personal car insurance usually extends to rental cars if you carry full coverage. Also, auto insurance will cover a rental car if you have rental reimbursement coverage. Check your car insurance policy to see what's included, and consider upgrading it to help cover a rental car during repairs.
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Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
UPDATED: Aug 5, 2025
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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Aug 5, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Does auto insurance cover rental cars? Your personal insurance should cover any rental cars you drive if you have full coverage.
Additionally, you must have rental reimbursement coverage on your policy to have your insurance pay for a rental car while your vehicle is being repaired. This add-on typically costs extra, and only applies if your car is in the shop after a car insurance claim.
Read on to know when your auto insurance covers rental cars and what you can do to reduce costs when you need to rent a car. To see rates from top auto insurance companies in your area, enter your ZIP code into our free quote tool.
Does my car insurance cover rental cars?
Generally, if you carry full coverage car insurance, it transfers to any rental car you drive, depending on your provider.
Below are examples of when coverage kicks in while driving a rental:
- Accidents
- Acts of nature, such as floods, tornadoes, and hurricanes
- Falling debris, such as hail or tree limbs
- Theft
- Vandalism
- Fire or smoke damage
- Animal damage, such as hitting a deer
However, a liability insurance policy typically doesn’t include rental cars, as it only covers injuries and damages to others.
Reading over your policy and understanding auto insurance coverages will help you determine when a rental is covered.
Read More:
- What is the cheapest car rental company?
- What happens if I don’t agree with the amount the insurance company is offering me for repairs to my vehicle?
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Rental Car Insurance vs. Rental Car Reimbursement Coverage
Rental car reimbursement coverage is different from rental car insurance. Rental reimbursement coverage helps cover the cost of a rental car while your vehicle is in the shop following an accident or other claim.
Rental Reimbursement Coverage Limits by Provider
| Insurance Company | Daily Limit |
|---|---|
 | $100 |
 | $50 |
 | $30 |
 | Direct billing |
 | $20 |
 | Direct billing |
 | $1,000 total |
 | Direct billing |
 | Direct billing |
 | $1,000 total |
 | $100 |
 | $75 |
 | $60 |
 | Not specified |
 | $50 |
 | $100 |
 | Direct billing |
On the other hand, rental car insurance covers you when driving a vehicle from a rental agency. It often includes liability, collision, and other optional coverages that pay for damage or injuries if you get in an accident while driving the rental.
Adding rental car coverage to your policy costs extra, but it’s generally less than renting a car for one day. Including rental car reimbursement on your policy is an inexpensive way to ensure you always have a ride without waiting on another insurance company.
Also, rental reimbursement coverage has specific limits. If you choose a more expensive vehicle or need the rental for longer than a month, you’ll have to pay any additional costs out of pocket.
Many insurance companies offer rental car reimbursement coverage, but usually cap it at around $30 to $50 per day.Tracey L. Wells Licensed Insurance Agent & Agency Owner
Each car insurance company handles rental car coverage differently. Some pay the rental car company directly, while others require you to pay upfront and then reimburse you.
Some companies may also partner with rental car companies that directly bill your auto insurance company to reduce or eliminate your out-of-pocket costs. However, going out of network means that you’re responsible for all rental car costs.
Rental car reimbursement coverage is not typically included in a standard insurance policy. Instead, it’s an optional add-on that costs extra, and not all insurers offer the coverage. Most insurers also require you to carry full coverage to add rental reimbursement.
Many insurers, including State Farm-approved auto body shops near you and those offering nationwide rental car insurance, offer policies that cover car rental while a vehicle is being repaired. This ensures you have a rental car while the car is in the shop, allowing you to maintain your routine without interruption.
In addition, rental reimbursement coverage has limits. So if you choose a more expensive vehicle or need the car for longer than a month, you’ll have to pay any additional fees for your rental out of pocket.
Some insurers also allow you to use public transportation, taxis, and rideshares with the coverage. Check with your car insurance company to see if you have rental car reimbursement coverage and learn how to use it.
Learn More: Can I get a rental car while my vehicle is being repaired?
When Auto Insurance Won’t Pay for a Rental Car
Car insurance pays for a rental car if your vehicle is getting repaired from a covered loss. However, don’t expect your insurance to pay if you need a rental car for another reason.
Examples of when car insurance doesn’t cover rental cars include:
- Vacation
- Routine maintenance, such as oil changes
- Mechanical breakdowns, such as engine repairs
- You don’t have car rental insurance coverage on your policy
If my car breaks down, will insurance cover a rental? No, insurance only covers rentals if your vehicle needs repairs from a covered claim, such as an accident, fire, or vandalism.
Do you need rental car reimbursement?
Although the cost of rental car reimbursement is typically low, it’s still an added expense. Removing unnecessary coverages is a great way to lower your auto insurance rates.
Keep in mind that you may not need rental car reimbursement coverage at all. For example, you can skip coverage if you have another car you can drive while yours gets repaired.
If another driver causes the accident, their car insurance may cover your rental car costs. However, you’ll need to wait for their insurer to approve the rental, and you’ll be subject to their coverage limits.Daniel S. Young Insurance Content Managing Editor
Additionally, if you can use public transportation, borrow a friend’s car, or get rides from others, you don’t need the additional cost of rental car coverage.
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Insurance Companies That Cover You When Your Car Breaks Down
No insurance company offers policies that pay for routine maintenance or mechanical breakdowns. However, a few providers offer mechanical breakdown insurance (MBI) to lower rates and repair costs for older vehicles after a breakdown.
The most popular auto insurance companies for mechanical breakdown insurance are:
- AAA
- Allstate
- American Family
- Geico
- Mercury
Each company offers different features with their policies, as well as deductibles. While some offer free towing or rental cars, others provide lower deductibles or roadside assistance.
Read More:
- What is American Family’s policy on rental car coverage during the claims process?
- Does my auto insurance cover towing and roadside assistance?
AAA Mechanical Breakdown Insurance
AAA Mechanical Breakdown Insurance provides roadside assistance and financial relief for costly maintenance repairs, but it does not cover rental cars after a breakdown.
There are no deductibles at AAA-owned repair shops. At AAA-approved mechanics, the deductible is $50.
However, you must be a AAA member to buy AAA auto insurance. AAA membership packages range from $59-$119 per year.
Read More: Does AAA cover rental cars?
Allstate Extended Care
Allstate Extended Care also comes with a cheap $50 deductible and covers the powertrain, core systems, and technology in your vehicle. It also gives drivers the luxury of choosing their own mechanic.
Allstate will also cover a rental car after a breakdown for up to $40 per day for 7 days and up to $100,000 of towing costs after a breakdown. However, Extended Care is limited and only applies for 7 years or 100,000 miles.
American Family ForeverCar
An American Family ForeverCar subscription will cover a rental car after a breakdown for up to $40 per day. Coverage also applies to up to 225,000 miles and includes a wide array of mechanical and powertrain repairs.
Drivers can choose their own mechanic and their own level of coverage, with additional platinum and powertrain coverage levels for extra protection.
Geico Mechanical Breakdown Insurance
Does Geico cover a rental car if my car breaks down? No. Geico MBI policies only cover repairs to mechanical parts of your car, but it will cover all those mechanical parts. Read our Geico car insurance review for more information.
Unfortunately, Geico has the highest MBI deductible on this list at $250.
You will also need rental reimbursement for Geico rental car insurance to apply during an MBI claim.
Mercury Mechanical Protection
Mercury Mechanical Protection offers some of the most extensive breakdown coverage, including rental coverage, roadside assistance, and trip interruption coverage. Drivers can also choose their own mechanic no matter what state they are in.
What to Know About Auto Insurance for Rental Cars
Insurance covers rental cars if you have the right policy. Rental car reimbursement is a feature you can add to your policy that pays for a rental if your vehicle gets damaged under a covered claim.
Most policies don’t automatically include the feature, and it makes your rates increase. However, rental car reimbursement is typically inexpensive. You can add or remove the coverage at any time.
Rental car reimbursement doesn’t cover a rental for vacation, routine maintenance, or if your car breaks down. Additionally, you might not need the coverage if you have another vehicle to drive, can take public transportation, or can get a lift from someone else.
Read More: Can I get a rental car while my vehicle is being repaired?
Frequently Asked Questions
Does my car insurance cover rental cars?
A basic car insurance policy doesn’t include rental cars since liability auto insurance coverage only pays for bodily injuries and property damage to others. However, full coverage car insurance, including collision and comprehensive coverages, pays for damages to your vehicle from various causes.
Learn More: Best Auto Insurance Companies
Am I responsible for maintenance on a rental car?
It’s also important to be aware of rental car maintenance responsibilities. Even though the rental is temporary, maintaining the car in good condition is crucial to avoid additional fees.
If a rental car breaks down due to mechanical failure, the rental company is usually responsible. However, if a mechanical breakdown is caused by the driver’s negligence, the driver will be responsible for the repair costs and any damages.
When you’re involved in an accident while driving a rental, you will need to ensure your auto insurance policy covers rentals. If not, then purchase additional liability coverage from the rental company. You can also check to see if the credit card you use for vehicle rental offers liability coverage.
How much does it cost for insurance to cover a rental if my car breaks down?
The cost of insurance coverage for a rental car after your car breaks down will vary depending on the insurance company and the specific coverage options you choose. On average, mechanical breakdown insurance (MBI) costs around $100 per year, while rental reimbursement coverage averages around $60 per year.
We recommend comparing quotes from multiple companies to find the best rates and coverage options tailored to your needs.
What is rental reimbursement coverage?
Rental reimbursement coverage is an optional add-on to your car insurance policy that pays for a rental car while your vehicle is being repaired from a covered claim. It is not automatically included in standard policies and may require full coverage.
When doesn’t car insurance cover rental cars?
Car insurance pays for a rental car if your vehicle is getting repaired from a covered loss. However, it doesn’t cover rental cars for non-accident-related reasons, such as routine maintenance, breakdowns, or vacations.
Do I need rental car reimbursement coverage?
Whether you need rental car reimbursement coverage depends on your individual circumstances. If you have alternative transportation options or access to another vehicle, you may not need this coverage. Additionally, if you can use public transportation or get rides from others, you may not require rental car reimbursement.
Is there a time limit on how long insurance pays for a rental car?
Yes, each car insurance company sets its own rules regarding rental car coverage. Typically, there is a daily limit and a maximum number of days for which they will reimburse you for a rental car after a covered loss. Once the time limit is reached, you will be responsible for paying for the rental car yourself.
Can you add rental reimbursement after an accident?
No, you cannot add rental reimbursement coverage after an accident has occurred.
Do body shops give rental cars?
Generally, body shops do not provide rental cars directly. You would need to arrange a rental through a rental car company, possibly covered by your insurance if you have rental reimbursement coverage.
Do car warranties cover rental cars?
Some car warranties may cover rental cars, but this varies by warranty. It is best to check the specific terms of your car warranty.
Does full coverage cover rental cars?
Full coverage does not automatically include rental car reimbursement. You need to add rental reimbursement coverage to have rental car costs covered.
Does Geico cover rental cars?
Geico covers rental cars if you have added rental reimbursement coverage to your policy.
If my car breaks down, will insurance cover a rental?
No, standard auto insurance does not cover rental cars for mechanical breakdowns, as only covered claims are included. Even then, you need to carry a rental reimbursement add-on to have your company cover a rental.
However, if your vehicle breaks down due to mechanical failure, your rental may be covered if you carry mechanical breakdown insurance (MBI) with certain companies.
Is mechanical breakdown insurance worth it? MBI can cost an additional $30-$100 per month and comes with higher deductibles, sometimes reaching $500 or more. MBI will not cover routine oil changes or tire rotations, however, so many drivers use this coverage for older vehicles with rare parts that are more expensive to repair.
If your car breaks down, and you need affordable insurance to cover a rental, enter your ZIP code to find affordable auto insurance companies in your area.
Will Progressive insurance pay for the rental car during repairs?
Yes, Progressive will pay for a rental car during repairs if you have rental reimbursement coverage as part of your policy.
Will State Farm insurance pay for a rental car during repairs?
Yes, State Farm will cover the cost of a rental car during repairs if you have rental reimbursement coverage as part of your policy.
Does my auto insurance cover rental cars when I am on vacation?
Most auto insurance covers you when driving your car out of state, but rental cars are different. Some insurers reimburse rental costs, but you must submit receipts.
Coverage in Canada often applies, but Mexico and other countries require separate insurance. Check with your insurer for details.
What can I do if my auto insurance doesn’t cover rental cars?
If your insurance company doesn’t cover rental cars, there are several ways to reduce out-of-pocket costs and ensure you have coverage while driving a rental car. The Insurance Information Institute recommends the following:
- Check if your home or renters insurance covers property theft from any vehicle you drive.
- Ask your credit card company how much auto insurance coverage it provides while traveling. Often, premium credit cards offer more extensive coverage.
- Purchase auto insurance from a rental car company, namely those located near airports or train stations. These companies typically offer coverage such as loss damage waivers, personal accident insurance, and personal effects coverage.
- Use a car-sharing program like Zipcar, which includes insurance in its fees.
- Consider a peer-to-peer rental service like Turo.
You can also buy rental auto insurance through a travel company or purchase non-owner auto insurance if you don’t own a car but frequently borrow or rent vehicles.
Non-owner insurance follows the driver rather than the vehicle, so it doesn’t include comprehensive or collision coverage. However, it may provide medical payments and uninsured/underinsured motorist coverage.
How much will it cost for insurance to cover a rental if my car breaks down?
The average mechanical breakdown insurance rates average around $100 per year. On the other hand, rental reimbursement averages around $60 per year.
To decide which type of insurance coverage fits your budget, shop around with auto insurance quotes from multiple companies to get the best rates.
Before your car breaks down, buy insurance to cover a rental. Enter your ZIP code to find affordable auto insurance quotes from companies in your area.
Compare over 200 auto insurance companies at once!
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Justin Wright
Licensed Insurance Agent
Justin Wright has been a licensed insurance broker for over 9 years. After graduating from Southeastern Seminary with a Masters in Philosophy, Justin started his career as a professor, teaching Philosophy and Ethics. Later, Justin obtained both his Property & Casualty license and his Life and Health license and began working for State Farm and Allstate. In 2020, Justin began working as an i...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.