Does auto insurance cover a rental during car repairs?

You may wonder how you’ll get around if your car is in the shop for repairs. While you might assume your car insurance pays for a rental, that’s not necessarily the case.

You need rental car reimbursement coverage added to your insurance policy for car insurance to pay for a rental. Typically, this is an add-on coverage that costs extra. In addition, it only pays for rentals if your car is in the shop from a covered claim.

If your car breaks down, undergoes routine maintenance, or you need a rental car for vacation, you’ll have to pay for a rental yourself.

Keep reading to learn more about rental car reimbursement and see if the coverage is right for you.

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.

You can add rental car coverage if you have full coverage, but it doesn’t come with it. Insurance covers rental cars if you have specific coverage like rental car reimbursement on your policy.

Below are examples of when rental reimbursement coverage kicks in during car repairs:

• 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 or squirrels damaging your car

If someone else causes the accident, their car insurance may pay for your rental car. However, you’ll have to wait for their insurer to approve the rental and be subject to their limits.

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.

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What is rental reimbursement coverage?

Will insurance pay for a rental car during repairs? If you have rental car coverage, your insurance pays for a rental while your vehicle gets repaired from a covered claim. However, many insurance companies require full coverage to add rental reimbursement.

Each car insurance company decides how it deals with rental car coverage. Some companies pay the rental car company directly, and some require you to pay, then they reimburse you. 

This table shows how some of the best auto insurance companies handle rental car coverage.

Rental car reimbursement coverage doesn’t usually come with a standard insurance policy. Instead, it’s an added feature that increases your rates, and not all insurers offer the coverage.

In addition, rental reimbursement coverage does have limits. For example, your policy may pay up to $30 daily for a rental for up to 30 days. 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 how to use it.

Does insurance cover the rental car when a car is in the shop? Again, there isn’t a cut-and-dry answer — it depends on your car insurance. Many car insurance policies extend to rental cars but read your policy to determine if you need extra 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, 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.

Read more: What happens if I don’t agree with the amount the insurance company is offering me for repairs to my vehicle?

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.

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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Does Insurance Include Rental Car Reimbursement: The Bottom Line

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.

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