Rental Car Reimbursement Coverage

Rental car reimbursement covers your transportation costs if your car was damaged, but you will need to have comprehensive and collision coverages in place to reap the benefits. Although the rental car reimbursement coverage can cost as little as $2 a month and has no deductibles, it does come with limits as to what the auto insurance company will pay. Rental car reimbursement for a driver who is not at fault is determined by the other car insurance company but is usually mandatory.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent

UPDATED: Feb 8, 2021

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A Concise Overview

  • Rental car reimbursement will cover either the cost to rent a vehicle or use other forms of transportation if you have the correct insurance
  • You can either have your auto insurance company pay outright the cost of the rental or have the company reimburse you for the costs
  • Although there is no deductible, there will be limits to how much your car insurance company will pay for the rental

Rental car reimbursement coverage is just like it sounds. Your auto insurance company will pay for a rental car or other modes of transportation while your vehicle is being repaired.

Keep in mind, there are limits to how much your car insurance company will pay, and you have to have the correct auto insurance coverages in place to take advantage of the reimbursement.

Shop around for auto insurance to find affordable car insurance with the coverages you want.

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What is rental car reimbursement?

If you have rental car reimbursement coverage, your auto insurance company will help cover transportation if your car is damaged. This can include rental cars, public transit, and ridesharing services.

However, you will have to have the correct coverages on your policy for this to work. For example, if your car is damaged in an accident, you will need to have collision insurance coverage in order for your rental car reimbursement to kick in.

The same goes for if your car is damaged from theft, you would need to have comprehensive insurance coverage in that situation.

This coverage doesn’t include paying for a rental if your car is just in the shop for repairs. It also doesn’t cover any deposits, fuel, or mileage charged by the rental company.

There’s no deductible for this type of coverage, but you will have limits as to how much your car insurance company will pay. For example, your policy may limit your rental to $30 a day for 30 days.

According to the Insurance Information Institute, the average time a car spends in the shop after an accident is two weeks. This means if your car is significantly damaged, you can expect a lengthy repair time.

Rental car reimbursement for the not-at-fault driver is a little different. In most states, the other driver’s car insurance company has to provide you with transportation, but there is no guarantee that they will pay the full amount.

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Is rental car reimbursement worth it?

Rental car reimbursement auto insurance rates tend to be low, so it’s a pretty cheap option to add to your auto insurance, usually about $2 to $15 a month. But that can really add up. At $15 a month, you are paying $180 a year.

Since Allstate estimates that a driver files a claim once every 10 years, you would pay $1,800 for Allstate rental reimbursement. That doesn’t make much sense. However, if you can get affordable rental car reimbursement auto insurance coverage for just $2 a month, the numbers work out much better.

Each company will charge different rates for the coverage. The Progressive rental car reimbursement prices and offerings will be different than the State Farm program.

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