What Is Rental Reimbursement Coverage? Do I Need It?
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- What is it?
- Not covered
- Do I need it?
- Worth it?
- How to rent
- Not at fault
- How to add
Rental reimbursement coverage ensures that you’re never left without a means of transportation if your vehicle is in an accident that puts it in the shop. That being said, insurance add-ons can add up quickly. Is rental reimbursement coverage really worth your investment?
Car insurance broker app Jerry has compiled everything you need to know about rental reimbursement coverage. Keep reading to learn more.
What is rental reimbursement coverage?
Rental reimbursement coverage is an optional coverage add-on designed to help cover the cost of transportation expenses while your vehicle is getting repaired following a valid insurance claim.
Rental reimbursement coverage might help cover the cost of anything from public transportation to a rental car, so it is always a good idea to check the details of your policy to see what is covered and what isn’t.
Generally speaking, rental reimbursement coverage is an excellent option for anybody who wants to make sure that they have a backup transportation plan in place should they need to file an insurance claim.
Most providers will only allow you to take out rental reimbursement coverage if you are subscribed to a collision or comprehensive policy package. If you only have standard car insurance coverage, rental reimbursement insurance is probably not an option.
Most providers will offer this type of coverage without a deductible.
MORE: Types of car insurance
Rental reimbursement coverage limits
Rental reimbursement limits can vary significantly from provider to provider, so it is good to keep this in mind when comparing car insurance quotes. No matter what policy you choose, there will always be limits to the rental coverage provided, either in terms of daily dollar limits or coverage time frame.
Some providers will allow coverage for public transportation costs or necessary cab fare and rental car coverage, while other policies will only cover the cost of a rental vehicle.
Some policies will include daily spending limits while others will only cover the cost of a rental car for a certain amount of time regardless of how long the repairs take.
The best way to understand the limits of your policy is to read it over to find out what is included in the coverage and what isn’t.
What does rental reimbursement insurance not cover?
There are a couple of important things to keep in mind about rental reimbursement coverage when considering your car insurance quotes.
The first is that it only applies to replacement transportation costs for a valid insurance claim through the same provider.
Basically, this type of insurance will only kick in once you are already processing a valid damage claim through your insurance provider and is only applicable if the vehicle needs repairs.
For instance, if your vehicle is involved in a collision and you process your claim through your collision coverage policy, your rental reimbursement insurance will kick in to help cover the cost of replacement transportation while your covered vehicle is being repaired. This also means that it will not help you save on rental vehicle costs for leisure, travel, or routine maintenance.
The second thing to note is that rental reimbursement is not the same thing as insurance coverage on a rental vehicle.
Even if you have rental reimbursement coverage, you will not be covered for insurance costs on a vehicle that you take out under this policy option. This point can definitely be confusing, so make sure that you always clarify the rental insurance process with your rental vehicle provider.
Do I need rental reimbursement coverage?
Rental reimbursement coverage is optional, but it is definitely a worthwhile investment if you already have a comprehensive or collision insurance policy in place. This is especially true if you’d be concerned about arranging alternate transportation if you are involved in a car accident.
Basically, rental reimbursement coverage will provide peace of mind that you won’t be stuck footing a big bill for rental transportation when you make a claim. If this is important to you, rental reimbursement coverage is probably a worthwhile option.
How much does rental reimbursement coverage cost?
One of the great things about rental reimbursement coverage is that it’s relatively affordable.
The monthly premiums will vary according to a full range of factors, but most drivers can expect to shell out somewhere between $2 to $15 a month to add rental reimbursement to their existing car insurance package.
Is rental reimbursement coverage worth it?
If you are the type of person who likes to take a more objective approach to your insurance coverage, you can calculate the average value of the investment by multiplying the monthly cost of this coverage option by 120.
The average person will only use this coverage once every ten years, so this will be a concrete figure of how much you can expect to pay in terms of premiums. If the coverage limit is less than the rental reimbursement insurance limit’s value, it might be worthwhile to invest.
How to rent a car with rental reimbursement coverage
There are two ways to take out a rental vehicle using your rental reimbursement coverage.
Pay out of pocket and submit the bill to your insurance: If you want to retain control of the rental process or have to get back on the road as quickly as possible, paying out of pocket for the cost of a rental and then submitting the bill to your insurance provider afterwards is probably the most convenient option.
This method gives you the freedom to choose the rental car you want to be driving while still enjoying the freedom to cash in on any applicable discounts, promotions, or rewards. However, it is probably not the best choice if you are strapped for cash or don’t want to front the bill.
Make sure that you thoroughly understand your coverage limits within your policy before personally securing a rental vehicle after an accident.
Let your insurance arrange the rental for you: If you don’t want the added stress of having to source your own rental car after you make a claim, you can always let your insurance company handle the rental process for you. Most drivers prefer this option because there is a good chance that you already have enough on your plate to deal with after filing a claim and arranging for repairs.
The downside is that you don’t get to choose your rental vehicle provider or replacement car. Still, you don’t have to worry about the paperwork or accidentally overstepping your policy limits. Remember that an insurance company that provides rental reimbursement insurance will probably have a good existing relationship with a trusted provider. This means that you might end up with a better vehicle at a better rate.
How does rental reimbursement coverage work when I’m not at fault?
Having rental reimbursement coverage is one thing, but what happens if the other driver is found to be at fault?
While your rental reimbursement coverage won’t come into effect unless you are filing the claim under your own personal policy, there is still a good chance that some of the costs of a rental vehicle or alternate transportation will be covered under the at-fault driver’s policy if your vehicle ends up in the shop.
This might not cover the entire cost of rental expenses, but you won’t be left footing the entire bill.
Will I have to pay a deductible for the rental car?
Most providers don’t require a deductible to make a rental reimbursement claim. Just keep in mind that this type of coverage only applies when you have already made a valid claim, so you will still need to be prepared to cover the deductible amount on your insurance policy as a whole.
How to add rental reimbursement coverage to your car insurance
Finding the right coverage can be challenging. In addition to having an existing collision or comprehensive policy already in place, you will be limited to the coverage options that your current insurer provides.
Put simply, the best way to make sure that you have a great rental reimbursement package is to make sure that you are subscribed to the ideal insurance policy.
Thankfully, Jerry is here to help. Our sophisticated technology will objectively calculate the best policies for you based on your personal insurance needs. Jerry will find you a great car insurance policy and tailor your add-ons to your needs. So what are you waiting for? Come check us out today to find out more.
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