| After you get over the initial shock of any auto accident you cause, you realize you'll have to pay your collision deductible. You'll also realize you need to rent a car while yours is being repaired. Some quick math will tell you that renting a car could easily cost at least $200 a week. If your car will be in the shop for a few weeks, your rental car costs could put you in the poorhouse.
| If your car will be in the shop for a few weeks, your rental car costs could put you in the poorhouse. |
In many cases, you can add rental reimbursement coverage onto your auto insurance policy at a low cost. For example, GEICO charges as little as $20 per year for a maximum of $750 in rental reimbursement with no deductible.
Some insurers adjust your cost depending on how much rental reimbursement coverage you want. For example, if you want to pay for a more expensive rental car because you drive an expensive car, you'll pay more in premiums.
Most companies will also cover rental bills if your car is stolen. However, this is not a sure thing, so check with your agent to see what circumstances are covered.
Opting for a lower daily limit on rental reimbursement leaves you with some choices. With a $15 per day limit for example, you could use that amount toward a rental car and pay any extra out of your own pocket. Another option allowed by most insurance companies is using that $15 toward taxi, bus or train fare. If your bus fare doesn't add up to $15, you will be reimbursed only for what you spent.
If your vehicle is older and you do not have more costly comprehensive or collision insurance, you still may want to consider buying rental reimbursement coverage. Although your vehicle may not be worth enough to carry comprehensive or collision, you probably want to cover yourself for the time between your car is wrecked and you buy another one.
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