Rental Reimbursement Coverage
What Texas Drivers Need to Know
What is Rental Reimbursement Coverage?
ental reimbursement coverage is an optional add-on to your auto insurance policy that helps cover the cost of a rental car if your vehicle is damaged in a covered accident and can't be driven. To add this coverage, you typically need to carry both comprehensive and collision coverage.
This coverage usually has a daily limit (like $40–$60 per day) and a maximum number of days it will cover, often up to 30 days. If your car is out of commission longer than that, you'll have to cover any additional rental costs yourself.
How Does it Work?
If you're involved in a covered accident and need a rental car, your insurance company may either pay the rental agency directly or reimburse you after you submit your receipts.
To speed up the process, let your claims representative know right away, as some insurance companies have direct billing arrangements with specific rental car companies.
Is There a Deductible?
Generally, rental reimbursement coverage does not have a deductible. However, it only kicks in if your vehicle has been in a covered accident.
Keep in mind that the accident itself may involve a deductible through your collision or comprehensive coverage.
When Does it Apply?
Rental reimbursement coverage only applies to situations where your vehicle is being repaired due to a covered accident or damage, such as a collision or storm-related incident. It does not cover:
- Mechanical breakdowns.
- Fuel costs, security deposits, or additional insurance from rental companies.
- Renting luxury or exotic cars beyond your policy limits.
For example, if your car is totaled after an accident and your policy has a daily rental limit of $50 with a maximum payout of $1,500, your insurer would cover up to $50 per day until the $1,500 limit is reached.
Who Pays for a Rental Car After an Accident?
If another driver is at fault, their insurance may cover your rental costs. However, this process can take time as fault is determined.
Using your own rental reimbursement coverage can get you on the road faster, and your insurer may seek reimbursement from the at-fault driver’s insurance later.
Can I Add Rental Coverage After an Accident?
Unfortunately, rental reimbursement coverage cannot be added to cover an accident that has already occurred.
If you want to include this protection, you’ll need to add it to your policy before any incidents happen.
Is Rental Coverage Worth It?
Renting a car for even a few days can quickly become expensive, especially if your vehicle requires lengthy repairs. Rental reimbursement coverage is usually inexpensive, adding just a few dollars to your monthly premium.
Consider your budget and how much peace of mind this coverage could provide if you’re ever in an accident.
