Car Insurance Matters

Rental reimbursement coverage helps you retain your ability to commute when your car is in the shop being repaired after an accident. This form of coverage is optional, but it's usually a good idea to add it to your insurance policy since it helps you continue going to work or school while your car is out of commission. To learn more about how rental reimbursement coverage works and when you should consider adding it to your auto insurance policy, read on.

How Does Rental Reimbursement Coverage Work?

When your car is in the auto shop for repairs due to a covered hazard, rental reimbursement coverage will help pay for the costs of renting another vehicle while the repairs are being made.

Auto insurance carriers offer two types of insurance that will pay for repairs to your vehicle. Collision coverage pays for any repairs that are needed due to an accident, and comprehensive coverage covers repairs that are needed due to everything else (for example, someone keying your car or stealing its catalytic converter.) If you're carrying this type of insurance and it's paying for your repairs, you'll be able to use your rental reimbursement coverage. Remember, rental reimbursement doesn't apply if your car is in the shop for a wear-and-tear-related reason, such as if it's having its transmission replaced.

You can use rental reimbursement coverage at any car rental agency, but auto insurance carriers typically partner with one or more of the nationwide chains. If you use one of their partners, the insurance company will pay the rental agency directly for your rental. If you use another rental agency, you can file a claim later in order to recoup the costs of renting a car. Rental reimbursement coverage will apply for as long as your car's in the shop. Once it's fixed and runs again, you'll take your rental car back to the agency and return it.

When Should You Include Rental Reimbursement Coverage on Your Auto Insurance Policy?

Adding rental reimbursement coverage to your policy is very inexpensive, so it makes sense for nearly everyone to carry it as part of their auto insurance policy. If your car needs extensive repairs after an accident, it may be out of service for quite a while. One reason for this is that the auto repair shop needs to wait for replacement parts to be shipped to them before they can even begin repairs.

If you rely on your car to go to work or school and you don't have an alternate form of transportation available, you'll need to rent a car. Rental reimbursement insurance will pay for most of the cost of renting a car or all of it depending on the coverage amount you select as part of your policy. Without rental reimbursement coverage, you'll be responsible for all of the costs of renting a car. If you don't have the extra funds to pay for it, you may have trouble getting to work, going to school, or shopping for groceries.

Overall, it's a good idea to carry rental reimbursement insurance as part of your auto insurance policy. It's inexpensive and it makes it easier to go to work or school while your car is in the shop. Without it, you may not have any form of transportation if your car is in an accident or is vandalized. Check your auto insurance policy to see if yours includes rental reimbursement insurance — if it doesn't, call up your insurance carrier and ask about adding it.