Perhaps you need a rental while your mechanic repairs your engine. Or maybe you need a car for the time being until your clunking transmission gets back to its perfect condition. There could be many reasons why you need a rental but unfortunately, not all insurance plans and companies cover rental in all conditions.
Now, you must be wondering if my car breaks down will insurance cover a rental? Maybe yes or no. While you may add a rental reimbursement to your current insurance plan, the company won’t reimburse you in all circumstances. If you are concerned about whether your insurance provider covers a car rental in emergencies, you must go through this guide.
Here we have detailed under which conditions insurance reimburses for rentals. Also, we have brought you some ideas to receive reimbursement by filing a claim successfully.
What is Rental Reimbursement Insurance?
It is an insurance policy that backs you following an at-fault accident to cover the cost of a car rental. That said, it is crucial to know that regardless of the rental coverage, your provider will likely not cover the rental cost due to certain terms and conditions. For instance, your provider won’t cover the rental cost if your vehicle breaks down because of breakage or mechanical failure.
The provider will only reimburse you if you make an accident claim or some similar sort of covered event. So, it’s important to learn the difference, as knowing what your insurance plan covers and what it does not will help you determine your coverage requirements.
How Rental Reimbursement works?
Like other insurance claims, rental reimbursement claims are filed the same way with your insurance provider. When you submit a claim for rental coverage, your provider will reimburse you up to the stated limit. The rental coverage limit could go up to $900/month. That’s $30/per day. That said, there are other rental coverage plans that the insurance provider offers at different deductible prices. Hence, reviewing them yourself is the best to get the best deal.
Here is how to get a rental reimbursement:
- Buy an endorsement for rental coverage: In order to get covered for rental reimbursement, you must purchase an endorsement which will be added to all vehicles on your insurance policy. Insurance claims which are filed under collision and comprehensive, provide coverage for car rentals. Due to this, some providers require both collision and comprehensive coverage on your policy to provide rental reimbursement. Those with only comprehensive coverage would not receive rental reimbursement covered under collision.
- File a claim: You can file for rental reimbursement in person, online or over the phone, depending on your insurance provider.
- Check your reimbursement amount: Before you get a rental, check the allotted amount for rental on your insurance policy. Either it covers you up to a certain monthly dollar amount or a per-day amount. This will help you determine your out-of-pocket expense.
- Select a rental car: Typically, insurance companies have partnerships with rental agencies. If you go for an agency covered in your insurance policy, the reimbursement amount will be directly paid to the agency by your provider. Otherwise, you will have to pay upfront and get reimbursed later.
- Crosscheck the details with the agency: Before you leave with your rental vehicle, check the details, like the car’s cost, who will be paying and when you will have to return it.
So that’s how the rental reimbursement works. Typically, your provider will give you approval for the rental until it gets your car is repaired.
When does insurance pay for a car rental?
Considering you have rental reimbursement coverage, your insurance company will reimburse you if your vehicle breaks down or is at a repair shop due to a covered loss. For those who don’t know, a covered loss is an insurance claim covered under your insurance policy.
You may need to check your insurance policy contract to find out what is not covered under your plan and what can risk your rental reimbursement. That said, as long as you have rental coverage on your policy, the provider will pay for rental under all the following circumstances:
- Accident with another vehicle
- Damage from animals. For instance, hitting a deer while driving or mouse infestation.
- Damage due to extreme weather
- Damage from falling objects
- Damage from fire or smoke
When does insurance NOT pay for a car rental?
If you have rental reimbursement coverage, your provider will reimburse you for any damage due to the above-mentioned reasons. However, the company won’t pay to cover your loss in some circumstances.
Following is when your insurance won’t pay for car rentals:
- Vehicle breakdown due to a mechanical failure
- Car is away for routine maintenance
- You are away on a trip and need a rental for your personal convenience.
So be aware that your provider won’t pay for a rental in any such situation even though you have rental reimbursement coverage.
Rental Coverage Limits
Rental reimbursement coverage has a limited coverage amount. Normally, the insurer pays on a daily basis until you reach the maximum limit. Also, some providers mention the number of days you can use it and over limits as well.
For instance, your provider will pay $25 per day for a maximum of 30 days or a lump-sum payout of $1000. This means that your provider will reimburse $25 for 30 days until you reach your limit of $1000.
On the contrary, if your rental costs more than the allotted amount per day or you use it more than your allotted number of days, the provider will cover the agreed number of days with the said amount. The rest will be your out-of-pocket expense. Therefore, it is recommended that you check your limit before getting a rental to know how much your out-of-pocket expense will be.
Frequently Asked Questions (FAQs)
1. What does rental car insurance cover?
Ideally, insurance providers cover damages due to accidents with another vehicle, theft, animal damage and vandalism. However, it could include or exclude some depending on the insurance provider.
2. Which credit card companies offer rental car insurance?
Some credit card companies offer rental car insurance to some extent. It is recommended to learn about your credit card offers for rental car insurance before renting a car. That said, the level of insurance majorly depends on the credit card you own and the issuing company.
3. How old must you be to get a rental car?
Age limit varies from agency to agency. However, most car agencies generally only allow drivers 18 or 18+ for car rentals. Others may require to be 21 or more. In fact, some companies charge more to drivers under age 25, costing them more than $25 a day.
Indeed, your insurance will reimburse you for car rentals if your vehicle suffers a covered loss. However, otherwise, it’s on you if the incident does not come under the agreed circumstances.
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