Rental Car Reimbursement Coverage: Should You Purchase This?

Rental car reimbursement coverage is an optional coverage item that can be added to your policy. The cost is minimal, usually $20 to $60 per 6 months dependant on the level of coverage chosen. With this coverage, a policyholder would be able to obtain reimbursement from their insurance company up to their coverage limit when the insured vehicle is involved in a covered loss. This coverage is not standard and must be requested by the policyholder. In the following I will inform you where to look to see if you have coverage, how to read your coverage limits and a few mistakes to avoid.

How do I know if I purchased the coverage? Your declaration page lists the specific coverage’s that each listed vehicle has. As a result, the 1st thing to look for is if you have collision and comprehensive coverage on the insured vehicle. Most but not all insurance companies require collision and comprehensive coverage on the vehicle before rental reimbursement is offered. Next look for a line item listed as “Rental” or “Ren” with a monetary amount listed to the side of it. You will have purchased this insurance only if there is a monetary coverage amount next to it and there is a policy premium amount listed for the insured vehicle. Next to the “Rental” line should be a few numbers such as 20/600, 30/900, or 40/1200, those numbers are your coverage limit amounts. The 1st number is the daily maximum coverage amount while the 2nd number lists the maximum coverage amount for 30 days total. If your policy states 30/900, then you would be covered for up to $30 per day up to a maximum of 30 days or $900, whichever comes first.

How do I know when I am covered? When you are involved in a covered loss, your rental car insurance coverage then comes into effect. If you are involved in a loss covered by your collision coverage such as a car accident, your coverage will be valid while the vehicle is in the shop being repaired, up to your coverage limits. If your vehicle is not drivable, you may be able to get a rental vehicle before the vehicle is being repaired. If you do decide to obtain a rental vehicle before it is in the shop, be sure to call the claim into your insurance company and get the vehicle to a shop ASAP to avoid the insurance company possibly denying coverage for the rental. There are a few exceptions where your rental car reimbursement coverage may not be available for a few days after loss, but to get specifics, please refer to your insurance policy document.

Mistakes to avoid. Many people make mistakes when they obtain a rental vehicle, below are a few mistakes to avoid. Don’t obtain a rental vehicle after the covered loss if your vehicle is drivable, most insurance companies will not cover this. They typically will only extend coverage to you when your vehicle is being repaired, or is at a shop. Your coverage is listed in 2 numbers, the 1st is the per day coverage and the 2nd is the maximum coverage. Most coverage is for a maximum of 30 days, to confirm, divide the larger number by the smaller, and the quotient is the number of days your coverage is for. This coverage is the maximum your insurance company will pay per day, therefore, make sure that the cost of the rental vehicle plus any taxes or fees are equal or less than the amount. If your vehicle is stolen, call the insurance company immediately after calling the police to report the car stolen since most have a clause in the policy that does not cover a rental vehicle for the first 48 hours after the reported loss.

What will the rental car insurance reimbursement coverage will pay for? Your rental car insurance coverage will cover exactly what it states, the rental vehicle. It does not cover added insurance, gas, or mileage fees to name a few. Most insurance companies have agreements with at least one company to provide a vehicle to their policyholder at a reasonable rate when involved in a covered loss. Check to see if they have a direct bill system set up and if they have a pre-negotiated rate with the company. Most rental vehicles are around $25 to $30 for an average vehicle, keep in mind that if you have a larger family or like a larger vehicle, then you might want to opt for the higher rental reimbursement coverage amounts. Be wary about the cost you incur because, in the event that the cost of your rental vehicle exceeds the coverage amount, you will be responsible for the excess cost.