Rental Car Reimbursement Coverage is Valuable and Inexpensive Protection

by JoAnne C.

Rental reimbursement coverage is one of the best add-ons you can buy to supplement your basic automobile insurance policy. It is a very inexpensive coverage, yet very valuable; one claim usage could recoup all you ever paid for the coverage. Unlike other coverages, the rental reimbursement one kicks in no matter what type of loss you have. If your vehicle is being repaired under either your collision coverage or your comprehensive (other than collision) coverage, you will be entitled to a rental car under this coverage.

Like other coverages, it is important to buy the right amount of rental reimbursement coverage. For example, Allstate Insurance Company offers rental reimbursement coverage (they call it UU coverage) in ten-dollar increments; you may buy $20, $30, or $40 worth (possibly more) of rental coverage. This is the daily limit that the insurance company will reimburse you for car rental expenses and includes tax on the rental car. The amount of policy premium that you would pay for each different level of coverage differs only very slightly. There is almost never a deductible on the rental reimbursement coverage. There will be a limit on the number of days you will be reimbursed for; usually 30 days.

If you buy a lower amount of coverage, it may only defray your rental expenses and not pay for what you really need to replace your own vehicle while it is in the shop. Many car rental businesses will only rent a very small economy car for under $20 per day; if that is all the rental car you need, you won’t need to purchase much coverage. However, if you have a larger family or some other reason for needing a larger vehicle such as a minivan, you would want to buy up to $40 a day if you do not want to pay anything out of pocket for the rental vehicle.

If you have the time, you may want to check out car rental prices in your area to see what you would need to pay before adding this coverage to your policy. Also remember that the prices that you see online (or elsewhere) may be higher than what a rental car company might charge you if an insurance company is involved. For example, rental companies such as Enterprise Rent-A-Car give slightly discounted rates to customers who have a claim pending with an insurance company that they partner with. They may even be able to set up a direct billing agreement with your company under this coverage so that if your rental expenses stay within your policy coverage, you may never need to see a bill.

This article is approved for informational purposes and is not intended to take the place of competent local legal counsel.

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Oct 24, 2014
Extra money
by: Anonymous

If I don't use the money of the Rental Car Reimbursement, can I just get check?

Our answer: Yes, you can, if you have the right coverage.

If you have a 'cash-out' option on your rental reimbursement coverage, you can agree to seek alternative transportation that is not a rental car (i.e. bike to work, or catch a ride with a friend) in return for a set amount of money for each day that your damaged vehicle is out of commission.

However, if you do not have the 'cash out' option under your rental reimbursement coverage, the cover is exactly that: reimbursement for rental expenses incurred.

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