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Rental Car Reimbursement Car Insurance

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Jeffrey Johnson graduated summa cum laude from the University of Baltimore School of Law and has worked in legal offices and nonprofits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman University and worked in film, education, and publishing. His professional writing has appeared on sites like The Manifest and Vice, and he is the author of a novel ...

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UPDATED: Oct 15, 2021

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Key Takeaways

  • Rental car reimbursement coverage costs between $2 and $75 per month
  • Coverage limits are defined by days and maximum claim amounts
  • You can get rental car reimbursement for other modes of transportation while your car is repaired

Rental car reimbursement car insurance is an additional policy that drivers can add to existing contracts. Rental reimbursement offers payment to drivers who lose their car after an accident.

Rental reimbursement can be added to any cheap car insurance at low rates.

What is rental reimbursement? It’s a policy used to help pay for a rental car, bus fare, or other public transportation fees while your car is repaired after an accident or collision. Rental reimbursement coverage is geared toward covered incidents that leave you without your vehicle.

Rental reimbursement car insurance rates can be as low as $2 per day and covers alternate transportation costs for several days or even weeks. Enter your ZIP code now to compare rental car reimbursement insurance quotes near you.

How much does rental car reimbursement coverage cost?

Rental reimbursement car insurance quotes can range quite a bit depending on the company you choose. Policies have rates between $2 and $75 per month with limits from $600 to more than $3,000.

A typical policy with a rental reimbursement car insurance company will have different rates with different companies:

  • AAA Insurance limits range between $35 and $75 per day with associated maximum limits between $1,000 and $2,250.
  • GEICO offers a $25 per day or $750 per claim rental reimbursement plan.
  • State Farm policies are about $10 per month, including a limit of $50 per day or $1,200 per claim.
  • Nationwide offers policies starting at annual base rates of between $27 and $90. The rental reimbursement policies range from $30 a day/$900 per claim to $100 a day/$3,000 per claim

Keep in mind that this type of protection is an add-on to an already standing auto insurance contract. It’s typically used by people who can’t wait for a payout for rental car reimbursement in a not-at-fault accident.

It would help if you also considered the cost of collision and comprehensive auto insurance to consider your overall auto insurance costs.

What does rental reimbursement cover?

Rental car reimbursement helps you pay for temporary transportation while your car is in the shop.

Where collision coverage picks up the costs of the damages to your car, this additional policy pays for the unseen costs of finding new transportation. However, like with all insurance policies, reimbursement coverage has limits and deductibles drivers must consider.

How much rental reimbursement coverage do I need?

The cost of renting a car can vary significantly. Some companies advertise $25 per day, and others are asking for more than $200. Compare that to the nominal cost of $2 to $25 for the rental car reimbursement add-on. 

The Insurance Information Institute reports that car repairs take an average of two weeks. Your insurance company will likely have a maximum number of days or amount of money for rental reimbursement, but rental car reimbursement is worth it if you can’t afford to lose your car for several days.

Coverage terms may vary depending on what company you choose. Most of the time, an auto insurance company allows you to pick the rental provider.

If you know a reliable rental service or know you can take public transportation, you can calculate how much reimbursement coverage you might need to determine if it’s right for you.

How does rental reimbursement work?

Rental car reimbursement insurance helps you cover the gap in transportation while your car is fixed after an accident. Once you’ve settled your car in the shop and have your rental picked out, you need to notify your insurance company.

Some auto insurance companies partner with rental companies, in which case third-party rentals will bill your insurer directly.

There are some cases where you may receive a discount for using a partner rental company. For example, Hertz and Enterprise offer discounts to affiliates of GEICO and other auto insurance companies.

If your rental is not affiliated with your insurance company, you need to file paperwork noting your rental costs.

If you’re not at fault and do not have rental car insurance, then you will likely pay out of pocket.

The at-fault driver will need to file a claim with their provider, and then you will need to record your reimbursement costs to that company. The paperwork process could take several weeks.

Rental Car Reimbursement Car Insurance: The Bottom Line

Rental reimbursement coverage may not be the right choice for you if you can afford the cost to rent a car or have an extra vehicle to get around in while your car is repaired.

If you live in a city or nearby your workplace, you may find that public transportation is suitable for you.

But affordable rental car reimbursement car insurance is easy to find if you’d rather have peace of mind. With a $3 per month add-on, you could be covered for $30 per day.

It’s best to shop around with multiple companies before you buy rental reimbursement car insurance to get the best rates. Enter your ZIP code above to compare free car insurance quotes today.

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