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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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Highlights:

  • Rental reimbursement can cover the price of a rental car used while your personal vehicle is repaired.
  • Rental reimbursement can’t be used for a rental car used on vacation.
  • Rates for rental reimbursement can vary with some being around $10/mo.

Sometimes after experiencing a problem with your personal vehicle, you might have to rent another vehicle in order to take care of your daily tasks. With the stress of a non-working vehicle already on your mind, you don’t want to have to worry about a rental car fee as well. This is where rental reimbursement auto insurance comes in.

Sometimes called “rental car coverage,” rental reimbursement coverage is offered by many top auto insurance companies. It is usually offered as additional coverage and doesn’t normally come with a standard policy. If you’re asking “why is insurance so expensive?” the answer doesn’t likely lie with rental car coverage, as it’s usually very inexpensive. As a result, many people find this minimal added expense worth the cost.

Limits on rental reimbursement car insurance coverage vary depending on your auto insurance company. Read on for more information about the coverage, then compare rates using our helpful comparison tool.

What is covered by rental reimbursement?

If your claim has been approved by your auto insurance company, then your rental car reimbursement coverage can cover the car rental use fee for an allotted period of time. In some cases, rental reimbursement can also cover public transport fees, cab fare, and rideshare costs. Claims that might require rental reimbursement will usually fall under comprehensive or collision coverage, depending on the circumstances surrounding the accident.

The exact amount of coverage you receive can greatly depend on your auto insurance company. It is important to inquire about the specifics of your rental reimbursement coverage with your auto insurance company. That being said, some companies will pay around $30 a day in rental fees.

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What doesn’t rental reimbursement cover?

If you were hoping that rental reimbursement would pay fees any time you rent a car that is sadly not the case. Rental reimbursement won’t cover things like rental cars used on vacation or rental cars used while your other vehicle is receiving routine maintenance like an oil change.

Rental reimbursement doesn’t cover a rental car when your car has broken down, either. It’s only available when repairs are due to a covered claim under comprehensive or collision.

How much does rental reimbursement coverage cost?

When looking to buy rental reimbursement car insurance, you will want to consider rates from different companies. Rental reimbursement car insurance rates can differ greatly based on many factors, including your specific auto insurance company. That being said, rates are normally somewhere around $10 monthly. To get accurate rental reimbursement car insurance quotes, contact an agent directly.

Should I get rental reimbursement coverage?

While rental reimbursement coverage can add a little more to your auto insurance bill, it might be worth it, especially if you end up needing to rent a car for a long period of time. Affordable rental reimbursement car insurance can be easy to find, depending on where you get it.

Rental car fees can add up, which is why many people invest in rental reimbursement. See the chart below for some examples of rental car prices in Los Angeles. Note: These prices can vary based on many factors.

Average Car Rental Prices in Los Angeles, CA

Rental Company Prices
EnterpriseAround $50 per day
HertzAround $50 per day
Budget Rent-A-CarAround $45 per day
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It’s also worth noting that you don’t have to pay a deductible when using rental reimbursement insurance as you do with other forms of coverage.

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Will rental car reimbursement cover a not at fault accident?

If you are in a car accident that was caused by another driver, usually their insurance will have to cover any transportation costs you accrue while your car is getting fixed. That being said, it’s not always required that their insurance pay the full rental amount. If you are injured in the accident, their bodily injury liability coverage may cover medical bills and more.

This can also depend on the insurance laws in your state. For a list of state insurance websites, check out the NAIC’s website.

As mentioned earlier, rental reimbursement is usually included as an extra coverage option from many insurance companies. There is a great company out there that will meet your needs when it comes to rental reimbursement car insurance. Get rates from some of the best companies by using our comparison tool today.

References:

  1. https://content.naic.org/state_web_map.htm