Does Car Insurance Cover Rental Cars While Your Car Is Being Repaired?

Your car insurance may cover a rental car if your policy includes rental reimbursement and the repair is due to a covered incident like an accident. This coverage may not apply if your car is having routine maintenance done.

By Mark Fitzpatrick

Edited by Rae Osborn

Updated: June 17, 2024

Advertising & Editorial Disclosure

Your car insurance may cover a rental car while yours is in the shop if your policy includes rental reimbursement coverage and the repair is due to a covered peril, like an accident or theft.

If you weren't at fault in a collision, the other driver's liability coverage will typically pay for your rental car. If you only have the state-required minimum liability coverage, it won't cover a rental car. You'll also need to pay out of pocket if your car needs repairs unrelated to a covered peril, such as routine maintenance or mechanical breakdowns.

How Rental Reimbursement Works
How to File a Claim for Rental Reimbursement
When Car Insurance Won’t Cover a Rental Car
Car Insurance Companies That Offer Rental Reimbursement Coverage
FAQ: Rental Car Insurance

Key Takeaways

Rental reimbursement coverage helps pay for a rental car when your vehicle is in the shop due to a covered incident.

The other driver's liability coverage will typically cover a rental car if you weren't at fault in a collision.

Rental reimbursement coverage usually comes with daily and total limits, so be sure to understand these before renting a car.

How Rental Reimbursement Works

Rental reimbursement is an optional car insurance coverage, often available for a small additional fee, that helps pay for a rental car when yours is being repaired after a covered incident (e.g., accident or theft). It typically kicks in if you have collision and comprehensive coverage on your policy and need a temporary replacement vehicle due to a covered claim.

Rental reimbursement doesn't automatically kick in just because you paid for a rental car. This coverage has specific conditions and limits:

Feature	Description
Requirements	Your insurer may require you to carry a full coverage car insurance policy to buy rental reimbursement coverage.
Daily Limit	The maximum amount your insurer will reimburse per day for a rental car.
Total Limit	The maximum amount your insurer will pay for the entire rental period.
Deductible	Some policies may have a deductible you need to pay before coverage begins.
Payment Options	Direct billing: Your insurance company pays the rental car company directly. Reimbursement: You pay the rental car company upfront and your insurance company reimburses you later.

Rental car reimbursement won't work retroactively. This means if you get into an accident and then decide to add rental reimbursement to your policy, your insurance company won't cover the rental car expenses. To be covered, you need to have the coverage in place before the accident happens.

OTHER COVERAGES FOR YOUR CAR

If your car ends up in the shop due to a covered peril, like a collision with another vehicle or damage from a hailstorm, your comprehensive and collision coverage will step in to help.

Comprehensive insurance covers damage caused by events other than collisions, such as theft, vandalism, natural disasters, or hitting an animal. Collision insurance covers damage to your car resulting from a collision with another vehicle or object, regardless of who was at fault.

You might also have roadside assistance, which can cover the cost of towing your car to the nearest repair shop.

How to File a Claim for Rental Reimbursement

Whether your car is already in the shop or you are preparing for potential repairs, typically, you'll need to follow these steps to file a claim:

1
Review your policy
Make sure you have rental reimbursement coverage before heading to the rental counter. Your policy will outline the coverage limits and any specific requirements.
2
Contact your insurer
Inform your insurance company about the incident and your need for a rental car. Have your policy number and details ready.
3
Get approval for rental
Before picking up your rental, get approval from your insurance company.
4
Gather documentation
Hold onto your repair estimate, rental car receipts and proof of payment. You'll need these documents to back up your claim.
5
Submit the claim
Follow your insurer's instructions to submit your claim, whether it's online, by email or through a claims representative. Most major insurers have apps where you can file and track claims.
6
Receive reimbursement
Once the claim is processed and approved, you will either receive reimbursement for the covered rental car expenses or your insurer will directly pay the rental car company, depending on your policy and the available options.

Keep all receipts and documents related to the rental and repairs. This will help ensure a smooth claims process and timely reimbursement.

HOW LONG WILL CAR INSURANCE PAY FOR A RENTAL CAR?

Your car insurance will typically pay for a rental car for up to 30 days while your car is being repaired due to a covered claim. However, this can vary depending on your policy's daily and total limits, as well as the time it takes to repair your car.

When Car Insurance Won’t Cover a Rental Car

While rental reimbursement coverage can be a lifesaver, it's not a free pass for every rental car situation. There are a few scenarios where your car insurance might not cover the cost:

You don't have rental reimbursement coverage

Even if you have collision coverage (which covers your own car's damage regardless of fault), it won't typically pay for a rental unless you've specifically added rental reimbursement. Collision coverage will pay for your car repairs, but not your rental.

Your car is in the shop for routine maintenance

Rental reimbursement is designed for unexpected events, not scheduled maintenance. If your car is in for an oil change or tire rotation, you'll likely have to pay for the rental yourself.

Your policy has exclusions

Some policies exclude coverage for certain types of rental cars, like luxury or exotic vehicles. Check your policy for any specific exclusions.

You choose a rental car that doesn't meet your policy requirements

Some policies may have restrictions on the type or size of rental car you can choose.

You were driving a car that you did not have insured

Rental reimbursement only applies to cars listed on your insurance policy.

WHAT IF I DON’T HAVE RENTAL REIMBURSEMENT?

Many credit cards offer rental car benefits, which could be a saving grace if you don't have rental reimbursement on your car insurance policy. These benefits often include coverage for damage to the rental car and theft. Some popular cards with primary rental car insurance include the Chase Sapphire Reserve® and Chase Sapphire Preferred® Card.

Credit card coverage may not be as comprehensive as a dedicated rental car insurance policy, so it's important to understand the limitations and potential gaps in coverage.

Car Insurance Companies That Offer Rental Reimbursement Coverage

Rental reimbursement is not a standard part of car insurance, but most major insurers do offer the optional coverage. While your collision or comp insurance will tow your car and pay for repairs, no other coverage will help pay for a rental to keep you mobile.

Other Cheap Car Insurance Providers

Allstate

Nationwide

Progressive

State Farm

Travelers

FAQ: Rental Car Insurance

Read below for answers to some frequently asked questions about car insurance and rental cars.

Will my insurance cover a rental car after an accident?

Yes, if you have rental reimbursement coverage on your policy and your car is being repaired due to a covered accident, your insurance should cover the cost of a rental car, up to the limits specified in your policy. If you were not at fault, the other driver's liability insurance may also cover the rental.

Does insurance cover a rental car if my car breaks down?

Generally, no. Rental reimbursement coverage typically only applies if your car is in the shop due to a collision or comprehensive insurance-covered peril, such as an accident or theft. Most policies won't cover a rental car if your vehicle needs repairs due to a mechanical breakdown or routine maintenance.

What if I only have the minimum required car insurance?

If you only have the state-required minimum liability coverage, it won't cover a rental car. Rental reimbursement is usually an optional add-on coverage that you can purchase for an additional fee.

About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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