Rental reimbursement coverage ensures you’re never left without a means of transportation if your vehicle is rendered inoperable by a covered loss. But despite the convenience, it may be an added

car insurance

expense you don’t need.

Rental reimbursement coverage: The basics

Rental reimbursement coverage is an optional add-on for your auto insurance policy that helps cover the cost of a rental car and/or other transportation expenses while your vehicle is in the shop for repairs associated with a valid insurance claim.

Depending on your insurance provider, rental reimbursement coverage may pay for more than just a rental car—it could also cover expenses for using public transportation. Plus, this optional coverage does not typically feature a deductible.

Most insurance companies will only allow policyholders to add rental reimbursement coverage to a policy that also includes either

collision coverage

comprehensive coverage

, or sometimes both. If your policy includes

liability insurance

only, you may not be eligible to add this coverage.

Key takeaway: Rental reimbursement coverage only applies to transportation expenses associated with a covered loss. It will not cover rental or transportation expenses for travel, routine maintenance, or other activities not associated with a claim.

Rental reimbursement coverage limits

Most rental reimbursement policies include a few common rules and limitations, such as:

Daily and per-claim limits: Your policy details will outline how much your policy will pay either per day or per claim for a rental car. If you rent a car that exceeds your daily limit, or your total rental bill exceeds the per-claim limit, you’ll be responsible for covering the additional costs.

Gas, mileage, and other transportation expenses: Rental reimbursement policies will not typically cover things like fuel, security deposits, and additional rental car insurance.

Fault: If you’re not at fault in an accident, you may not need to file a claim with your own provider. In this case, the at-fault driver’s insurance would usually be responsible for providing you with alternative transportation.

While rental reimbursement coverage pays for the cost of a rental or other transportation following a covered loss, rental car insurance pays for damages and losses to a vehicle you’ve rented. Rental reimbursement coverage does not include collision damage waivers, rental car liability coverage, personal accident insurance, or personal effects coverage associated with rental car usage.

Rental reimbursement coverage costs an average of $5 per month

Rental reimbursement is typically pretty affordable—especially if your policy covers a standard compact car rather than larger vehicles, like trucks or SUVs. The lowest coverage typically pays about $30 per day for a rental, which will usually be enough to cover an economy or compact vehicle at most rental agencies.

For example, Forbes gathered the following figures for rental reimbursement rates from

Nationwide

in Florida1:

Daily and total maximum	Annual base rate
$30 per day / $900 max	$27
$40 per day / $1,200 max	$36
$50 per day / $15,00 max	$45
$60 per day / $1,800 max	$54
$75 per day / $2,250 max	$67.50
$100 per day / $3,000 max	$90

Your monthly premiums will vary not only based on the policy limits you choose but also on where you live.

To find out how much you’ll pay for rental car reimbursement coverage, use the Jerry app.

If you already have auto insurance coverage through

Jerry

, just choose the “Add Coverage” option to see pricing on your current policy or pull quotes from other providers.

If you’re not a current Jerry customer, you can still get quotes that include rental reimbursement insurance by answering a few questions to set up your profile and pull quotes from over 55 top providers.

How to rent a car using your reimbursement coverage

You have two options when it comes to having your rental covered by a rental reimbursement policy:

Option 1: Pay for your rental car out of pocket and submit your rental bill to your provider for reimbursement

This method gives you the freedom to choose the rental car you want and take advantage of applicable discounts, promotions, or rewards. But it may not be the best option if you’re strapped for cash and don’t plan to use a credit card for your rental.

Option 2: Let your car insurance company arrange the rental for you

While you have less control with this option, you do get to take advantage of established relationships your provider may have with rental car companies in your area. This means you could get a better car at a cheaper rate than you could on your own.

To see how to file a rental reimbursement claim, check your policy documents or contact one of your carrier’s licensed agents.

Is rental reimbursement coverage worth it?

According to the Insurance Information Institute (III), vehicles spend about two weeks in the shop getting repaired after an accident.2 Renting a car for two weeks can be expensive, so the added nominal cost of a reimbursement policy may be worth it.

Josh Damico

VP Insurance Operations

Things like rental reimbursement are nice to have, but if you have more than one car on your policy, you might not need a rental car in the event of an accident. That could easily save $10 or more on your policy per month.

FAQs

What is rental reimbursement coverage?

Rental reimbursement coverage is an optional additional coverage option that offers transportation expense coverage while your vehicle is in the shop for repairs associated with a covered claim.

Why get rental car reimbursement insurance?

If you rely on your car to get to work or take your kids to school, rental coverage can help ensure you still have transportation following a car accident. It also gives you peace of mind knowing you won’t be responsible for upfront rental costs.

How much does rental reimbursement cost?

Depending on daily and overall limits and where you live, you should expect to pay around $30 to $90 per year for rental reimbursement coverage.

Does my car insurance cover a rental car after an accident?

Your insurance policy might cover a rental car post-accident, though you normally have to purchase this coverage as an optional add-on to a comprehensive or collision policy. Check your car insurance policy details to see if rental reimbursement is covered in your policy.

Can I add rental reimbursement after an accident?

Yes, you can add rental reimbursement at any time but you won’t be able to use it until your next accident. Rental reimbursement coverage, once added, will only apply to future accident claims.

Does insurance cover rental cars for recalls?

Probably not, since a recall is not associated with a collision or comprehensive claim. Check your policy details to see when and if rental cars are covered by your policy.

Does Chase Sapphire cover rental car insurance?

Chase Sapphire Preferred offers several travel benefits to cardholders, including rental car insurance coverage, though restrictions apply to things like vehicle types and eligible rental agencies. Check your card agreement for details, or call a representative at 888-320-9961 to see how your coverage applies.

What is collision damage waiver insurance?

Also known as rental car insurance, collision damage waivers (CDW) cover damage to and sometimes theft of a rental car during your rental period.

Does rental car insurance cover theft?

Your rental car policy might cover theft, but that depends on your policy. To see if theft is covered by your rental car insurance, check your policy details.

Does Farmers Insurance cover rental cars?

Farmers notes that most types of rental vehicles are covered by your personal auto policy.3 Farmers also offers rental reimbursement coverage as an optional add-on to collision or comprehensive insurance policy.

How is rental reimbursement coverage different from rental car insurance?

While rental reimbursement coverage pays for the cost of a rental or other transportation following a covered accident, rental car insurance pays for damages and losses to a vehicle you’ve rented. Rental reimbursement coverage does not include collision damage waivers, rental car liability coverage, personal accident insurance, or personal effects coverage associated with rental car usage.

SOURCES

https://www.forbes.com/advisor/car-insurance/rental-reimbursement/

https://www.iii.org/article/will-my-insurance-cover-renting-car-after-accident

https://www.farmers.com/learn/insurance-questions/does-my-auto-insurance-cover-rental-cars/