If My Car Breaks Down, Will Insurance Cover a Rental?

Car insurance may cover the cost of a rental if your insured vehicle suffers a covered loss. If it’s in the shop for other reasons, you’re responsible for the bill.
Written by Sarah Gray
Reviewed by Amy Bobinger
If your car is in the shop for repairs following a covered loss, your auto insurance policy may cover the cost of a rental. But if your vehicle breaks down or it's in the shop for routine maintenance or repairs, don’t expect your provider to cover the bill.
If you’re left carless because of a mechanical issue, odds are, you’re going to need to pay for a rental on your own. Even if the breakdown is the result of a car accident, vandalism, or damage resulting from something that’s covered by comprehensive or collision insurance, your insurance provider won’t cover a rental unless you have a rental reimbursement endorsement on your
car insurance
Car insurance can be confusing enough without considering all the different
types of coverage
available, so we’ve created this guide to help you understand when a rental is covered and when it’s not. Plus, we’ve added details about rental reimbursement policies to help you understand what they are and whether adding one to your policy is the right move for you.

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

No. Even if you have
full coverage car insurance
, your insurer will not cover the cost of a rental car if your vehicle breaks down. Insurance will only cover the cost of a rental car if your car is in the shop for
car repairs
related to a covered claim. Even then, you’ll need to have a rental car reimbursement endorsement on your policy to ensure your rental will be covered.
MORE: How to get a car rental discount code
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When will your car insurance pay for a rental car?

Even if your insurance policy includes
collision coverage
comprehensive coverage
, you’ll still be expected to cover the cost of a rental car while your vehicle is in the repair shop for a breakdown or even covered repairs. If you’ve added
rental reimbursement coverage
to your insurance policy, your provider will help cover the cost of your rental following a covered claim

What is rental reimbursement coverage?

Rental reimbursement insurance is an optional coverage add-on that can help cover the costs of rental and other transportation expenses if your vehicle is undrivable due to damage caused by a covered loss.
Depending on your provider, your rental reimbursement policy may or may not cover anything from a rental car to public transportation costs. That’s why it’s important to check the details of your policy to see what types of transportation expenses are covered—and which ones aren’t.
Key Takeaway Even with rental reimbursement coverage, your insurance policy won’t cover rental expenses if your vehicle breaks down from normal wear and tear.
MORE: 7 ways to save money on car rentals

How does rental car reimbursement coverage work?

In most cases, rental car reimbursement coverage will pay for the cost of a rental car for up to 30 days. When you file a claim for a covered loss, your insurer will extend coverage for a rental vehicle.
But that doesn’t mean you can run out and rent a
for a month. In addition to a 30-day time limit, your policy will also include pricing limits. These limits vary depending on providers, but generally include:
  • Daily limits that set the maximum amount your insurer will pay per day for your rental car
  • Maximum coverage limits that put a cap on the total dollar amount your coverage pays for a rental or other transportation expenses
  • Percentage amounts that state how much of the rental car costs your provider will cover up to an overall limit
Most rental reimbursement policies will include some combination of the above limits on your policy.
When it comes to reserving and paying for your rental car, you’ll usually have two options—pay out of pocket and submit your bills for reimbursement, or let your provider arrange the rental for you. There are benefits and drawbacks to each of these options.
Most drivers opt to let their insurance company handle the rental for them. It takes the added stress of setting up a rental off your shoulders, plus it ensures you won’t have to pay upfront for the rental car. Easy peasy.
Unfortunately, it also means that you won’t get to choose the rental car company you use or the car you wind up driving while yours is out of commission. If you’re someone who likes to take advantage of loyalty programs via rental agencies or credit cards, you’ll be forfeiting your chance to rack up some points here.
Some policyholders choose to handle the rental on their own. You’ll have the freedom to choose the rental company and vehicle you want, apply discounts, and take advantage of promotions and loyalty programs. On the other hand, you’ll be out the upfront cost of the rental and you run a greater risk of exceeding policy limits.

Who should get rental car reimbursement coverage?

If you can easily afford the cost of renting a vehicle for weeks or months at a time, rental reimbursement coverage probably isn’t something you need. But most of us don’t fall into this category. That means almost anyone who has a car can benefit from adding a rental reimbursement policy to their coverage.
Car rentals can get really expensive really fast, but rental reimbursement can help keep these costs low. Plus, even if you plan to take public transportation while your car is in the shop, this will usually still result in an added expense you weren’t planning for. If your policy covers transportation costs other than rental cars, you might be covered.
Even if you fall into the privileged category of being able to afford a rental on a whim, you could still benefit from the ease of a rental reimbursement policy. You’ve already got the hassle of filing insurance claims to deal with—if you have an insurance policy with rental reimbursement coverage, getting a rental car is just one less thing to worry about.

How to add rental car reimbursement coverage to your auto insurance policy?

How you go about adding a rental reimbursement policy to your current coverage will depend on your provider. No matter who provides your coverage, though, you will need to ensure you have a policy that includes collision or comprehensive insurance—and sometimes both. Policyholders who only carry
liability insurance
usually don’t qualify for rental reimbursement policies.
If you have the basic coverage you need, adding rental reimbursement coverage to your policy could be as simple as making a phone call to your insurance agent or opening a mobile app. Whenever you’re looking at adding coverage to your auto insurance policy, you should always shop around to ensure you’re getting the coverage you want at the price you want before you make your purchase.
Put simply, the best way to add a rental car reimbursement endorsement to your auto insurance policy is to first ensure you have an auto insurance policy that’s optimized for you. This means you should compare
insurance quotes
from at least a handful of providers before settling on the policy that includes the coverage options you need.
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If your car insurance policy includes
mechanical breakdown insurance (MBI)
, you can file a claim against this policy if your car breaks down. MBI is a type of optional insurance add-on that can help cover the costs of repairs and replacement parts following a breakdown.
Put simply, vehicle insurance helps cover the costs associated with accidental damage—MBI helps cover the costs associated with wear and tear on your vehicle.
There are lots of benefits to getting a rental car through your car insurance company rather than setting it up yourself. You won’t have to worry about the stress of setting up a rental, you’ll avoid upfront costs, and you won’t need to worry about accidentally overstepping your policy limits. Plus, insurance companies work with rental agencies all the time—this means they have established relationships that can often result in better deals on a nicer rental car for you.
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