If your vehicle were damaged in an accident, how would you get to work or drive your kids to school? Most Auto policies give you the option to add the Rental Reimbursement option to vehicle(s) that you fully insure. This covers all or part of the cost of a rental car if your vehicle is disabled due to a loss covered by your policy, giving you something else to drive while your vehicle is being repaired.
If your vehicle is involved in an accident and isn’t drivable, Rental Reimbursement coverage typically kicks in right away. If your car is drivable after an accident, then a rental car will normally be offered for the period of time that it is in the shop. If the cost to repair your vehicle is too high and the insurance company declares it a total loss, the rental car will typically extend until shortly after your claim is settled.
When you add Rental Reimbursement coverage to your vehicle, you will usually get to choose from optional limits such as:
Locally, most insurance companies will offer to set you up with a rental car through Enterprise. In this arrangement, Enterprise will directly bill your carrier for the cost of the rental car, up to your coverage limit(s). However, if your total cost (including taxes) for the rental car exceeds the daily or total limits shown above, then you will be responsible for the difference. Because Enterprise typically provides discounted insurance rates, $30 a day is usually about enough to cover the cost for their most basic vehicle in Bemidji.
You also have the option to choose your own rental car provider. In this case, the rental car provider might bill your insurance company (if they are willing to do so); otherwise you can pay for the rental care and then submit your receipt to your claim adjuster and ask for reimbursement up to your covered limit.
Because rental car agencies in town run a fairly tight inventory, it’s usually best to reserve your rental car as soon as you schedule the repairs with your body shop. If your vehicle isn’t drivable after an accident or if your vehicle is stolen, it can be hit and miss as to whether a rental car will be available immediately or not.
Rental Reimbursement is priced quite reasonably – often costing $1 to $4 per month per vehicle. Some insurance companies will actually include a nominal limit for free on all vehicles that they fully insure. Most often, if a limit is included for free it is $20 per day. We represent one insurance company that includes $30 per day at no additional charge.
It’s important to note the Rental Reimbursement doesn’t kick in unless there is damage to (or theft of) your vehicle which is covered under your policy. Since Auto insurance doesn’t cover mechanical issues, you can’t use your Rental Reimbursement coverage if your vehicle goes in the shop needing transmission work or a new carburetor. You also can’t buy Rental Reimbursement coverage on a vehicle you insure for “Liability only”.
Some people may choose not to buy Rental Reimbursement coverage under the assumption that their body shop will provide a loaner car or that a rental car will be covered by their vehicle warranty. However, our experience is that only in rare cases do body shops provide loaners, and any rental car coverage in your warranty probably only applies if you have a warranty claim for a mechanical issue to your vehicle.
While making the wrong decision on whether to add Rental Reimbursement won’t make or break you financially, I can tell you that having this coverage definitely makes things easier after an accident. If you don’t have access to backup vehicle, I think this is probably worthwhile to add.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.