If my car breaks down will insurance cover a rental

by Stable MARK | Updated: August 8, 2022

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If your car breaks down or is in the shop for a covered claim, your rental reimbursement coverage will kick in and cover the cost of a rental car. This way, you can always get where you need to go, even if your own car isn't available.

Rental car reimbursement is a great way to make sure you're never without transportation. Let's see why.

When unexpected issues come up with your car like if it's unusable after an incident, understanding your auto insurance policy and what is and isn't covered under rental reimbursement coverage can help you determine your insurance needs.

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How does rental reimbursement work?

Rental reimbursement is a great way to make sure you're never without a car after an accident. Your insurance company will extend coverage up to your coverage limits, so you can always have a rental car while your own car is being repaired. With rental reimbursement, your coverage could be a total amount, like $900, or a set amount of $30 a day, and up to $900 total. There are different coverage limits for rental reimbursement, so reviewing your coverage options with your insurance agent or company is the best way to make sure you're always covered.

Purchase an endorsement for rental reimbursement

Adding an endorsement for rental reimbursement coverage is generally required in order to have this type of coverage for your vehicles. Rental reimbursement provides coverage for claims filed under comprehensive insurance or collision insurance. Because of this, some insurers require that you have both types of coverage on your policy. However, others only require comprehensive coverage. In cases where your policy only has comprehensive coverage, rental reimbursement would not provide coverage for incidents that are typically covered under collision insurance since those would also not be covered.

File a claim

There are typically four ways that you can communicate with your insurance company: online, in person, over the phone, or through their mobile app. Depending on your preferences and needs, you can choose the method of communication that works best for you.

Check your coverage amount

It's important to find out how much rental reimbursement coverage you have before you rent a car. This way, you'll know if you'll have to pay anything out of pocket. Your coverage may either be a specific dollar amount per day or a total amount. Either way, it's helpful to know in advance so you can plan accordingly.

Choose a rental car

If you're renting a car, it's usually best to go with a company that has a partnership with your insurance company. That way, the insurer will pay the rental agency directly for your rental car. If you don't use a partnered company, you may have to pay for the cost upfront and then get reimbursed by the insurance company.

Confirm the details with the rental car agency

Before you drive off in your rental car, be sure to review the costs, coverage, and return policy. You'll usually only have insurance coverage for the time it will take the shop to repair your car. So, it's important to know what you're responsible for in case of an accident. By being prepared, you can avoid any unwanted surprises and enjoy your trip worry-free.

When does car insurance cover rental worth it?

If you have rental reimbursement on your car insurance policy, you will be covered in the event of a qualifying claim. In order to be eligible for coverage, you must already have rental reimbursement on your policy prior to the accident. If you are not at fault, while your vehicle is under repair, the other driver’s property damage liability insurance will pay for your rental car.

There are two instances when your car insurance will cover a rental car:

If you are at fault for an accident and the damages are covered under your comprehensive or collision coverage
If the other driver is at fault and their property damage liability covers the damages

There are two instances when your car insurance won't cover a rental car:

If your vehicle breaks down due to a mechanical issue, or
If your car is under repair for routine maintenance

Does car insurance include rental reimbursement coverage?

Adding rental reimbursement coverage to your car insurance policy is a smart idea, even though it's not standard in many policies. Many insurance providers offer it as an add-on, and it usually doesn't impact the cost of your policy by very much. Rental reimbursement or loss of use coverage is a type of auto insurance that can help cover the cost of a rental car if your car is damaged in an accident. This coverage usually comes with limits, which are listed in your policy as a per-day and per-incident cap. For example, you might be covered for up to $30 a day and $900 in total. This coverage can be a lifesaver if you're ever in an accident and need to rent a car.

Rental car reimbursement vs. other optional coverage types

It may be helpful to differentiate rental reimbursement and loss of use coverage from other types of coverage that may sound or function similarly. This can help you to better understand how these coverages work.

If you're involved in an accident or your car is damaged, rental reimbursement or loss of use coverage can help pay for a rental car. This optional coverage is well worth the investment, as it can save you a lot of money and hassle in the event of an accident.

If you're involved in an accident while driving a rental car, you could be left with a huge bill if you don't have rental car insurance. In most cases, your regular auto insurance policy will extend coverage to your rental car. But if your insurer restricts this extension, or your policy does not have comprehensive collision coverage, you could be left high and dry. It's always better to be safe than sorry, so consider buying a standalone rental car insurance policy to protect yourself (and your wallet) from potential accidents.

Mechanical breakdown coverage protects against mechanical issues with your car's internal parts, like the transmission or drivetrain. However, it does not cover general maintenance or repairs. Additionally, it does not include rental car reimbursement coverage.

Is rental reimbursement coverage necessary if you are not at fault in an accident?

If you are left without a vehicle after an accident caused by another driver, their property damage liability insurance should cover the cost of your rental car. This coverage usually pays for a reasonable replacement, meaning it may cover a vehicle similar to the one you own. You will continue getting rental car coverage from the at-fault driver’s policy until your car is repaired. You will get rental coverage also if your vehicle was totaled, until the moment you get paid for your vehicle.

It's important to have rental reimbursement coverage in case you're in an accident and your car is damaged. If someone else is at fault, you can use your own coverage right away and then get reimbursed by their insurance company. This way, you don't have to worry about being without a car while the investigation is taking place.

When does car insurance not cover rental car expenses?

Although rental reimbursement coverage can be helpful in many situations, there are some instances when it will not cover your rental costs. For example, if you have two vehicles listed on your policy (e.g., a car and a truck), and only the car has rental reimbursement coverage, you would not be able to use that coverage if the truck was in an at-fault accident that required a rental.

Rental car expenses are not covered in the following cases:

Routine maintenance: If your car is in the shop for standard maintenance, your car insurance company should cover the costs of a rental car during that time.
Vacationing rental: If you're planning a trip and want to rent a car at your destination, it's important to know that your regular car insurance policy most likely won't cover those rental expenses. Whether you're traveling for business or pleasure, you'll likely have to pay those rental fees out of your own pocket.
Mechanical breakdown: your car breaks down and you're left without a ride, rental reimbursement coverage won't help. It will only pay for the cost of a rental car while your own car is being repaired due to a covered loss.

Takeaway

Overall, rental reimbursement coverage is a great add-on to your car insurance policy. If you experience a covered loss, it can help pay for a rental car. It's important to understand that there are limits to this coverage. You may be able to get coverage for a rental car from the at-fault driver's insurance company if you're in an accident that wasn't your fault. But the process could take some time. If you only have one vehicle, most insurance experts recommend getting rental reimbursement coverage. It's relatively low cost and can give you peace of mind in case of an accident.

If my car breaks down will insurance cover a rental

How does rental reimbursement work?