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If you’re involved in a car accident, you might wonder how you’re going to get around while your car is in the shop. How will you get to work or school? What about getting groceries or other supplies? And what if you can’t afford a rental car?
The good news is that there’s a type of car insurance that pays for a rental car during repairs called rental reimbursement coverage. This is optional coverage that will pay for a rental car while yours is in the shop for a covered claim. Although this type of coverage may solve the problem of getting around after an accident, it does come with some limitations. Here’s what to know.
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Will insurance pay for a rental car during repairs?
Yes, your insurance will pay for a rental car during repairs after a covered accident as long as your policy includes rental reimbursement coverage. You can file a rental reimbursement claim right away, regardless of who caused the accident. If you are at fault, your insurer will reimburse you for the rental car. If the other driver is at fault, their insurance will cover the rental, and you or your insurer will be reimbursed.
Rental reimbursement will also cover public transportation costs, like bus or taxi fares, but you may need to submit receipts for each expense to your insurer.
🤓 Nerdy Tip
You’ll likely be required to have full coverage insurance before you can add rental reimbursement to your policy. “Full coverage” isn’t a type of car insurance coverage. It’s typically a combination of liability car insurance, plus comprehensive and collision coverage. » MORE: The 8 key types of car insurance
What about if your car breaks down?
If your vehicle goes into the shop for a reason besides a covered claim, your insurance probably won’t cover a rental car or other transportation costs.
Rental reimbursement coverage only covers transportation costs connected to an insurance claim. So if your vehicle breaks down due to a covered event, such as an accident or a fallen tree, your insurance will pay for a rental car during the repairs.
You may be able to add mechanical breakdown coverage to your policy if you drive a newer car. Sometimes called car repair insurance, this coverage is an alternative to an extended warranty. It can help pay for mechanical repairs after a breakdown, even if the repair costs aren’t covered under a manufacturer’s warranty.
Similarly to rental reimbursement coverage, mechanical breakdown coverage often includes a daily limit for rental cars while your vehicle is in the shop.
Rental reimbursement limits and restrictions
Rental reimbursement typically comes with restrictions on how it can be used. These usually include a limit on the:
- Number of days your rental or transportation costs are covered.
- Daily cost your insurer will cover for rental or transportation fees.
- Total amount of expenses covered.
Additionally, your insurer will only cover the costs up to your policy’s limits, including fuel costs and rental insurance fees. You are responsible for paying any additional expenses beyond that limit, even if you need a larger vehicle or live in an area with high rental prices.
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