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After you overcome the initial shock of causing a car accident, you’ll need to make arrangements to get your car repaired and pay your collision deductible, assuming you carry collision coverage. You’ll also probably need to arrange for alternative transportation for yourself. In most cases, that means renting a car.

Based on where you rent and what you want to drive, you can pay anywhere from $200 to $400 per week for a rental car. This is where rental reimbursement coverage can be a lifesaver.

What is rental reimbursement car insurance?

Rental reimbursement car insurance, also known as rental car coverage, is an optional addition to your auto insurance policy. It’s designed to cover the cost of renting a replacement vehicle while your car is undergoing repairs after an accident or other covered incident. 

Rental reimbursement is not automatically included in most car insurance policies, but you can add it at an affordable cost. According to the Insurance Information Institute, rental reimbursement coverage is available for $1 to $2 monthly. 

What does rental reimbursement cover?

Rental reimbursement coverage typically pays for a rental vehicle while your vehicle is being repaired or replaced. 

Rental reimbursement coverage typically applies when your vehicle is out of commission due to covered events, which can vary depending on your insurance policy. It has a daily limit, which is the maximum amount your insurance company will pay per day for the rental vehicle. 

Insurance policies may provide flexibility in choosing a rental vehicle. You can typically rent a car similar in size and class to your own, but you may be responsible for any costs associated with upgrading to a larger or more expensive car.

How much is rental reimbursement coverage?

Rental car reimbursement coverage rates vary by insurance company. If you’re not sure about whether you already have rental reimbursement coverage, you can check the declarations page of your policy or contact your insurance company to confirm your coverage details.

Do I need rental reimbursement coverage?

Whether or not you need rental reimbursement coverage depends on your circumstances. If you have another car you can use while your vehicle is being repaired, or if you have access to public transportation, you may not need rental reimbursement coverage. 

However, if you rely on your car for transportation and cannot afford to be without it for an extended period, rental reimbursement coverage may be a good option for you. Additionally, if you are at fault in an accident and do not have rental reimbursement coverage, you may be responsible for paying for the rental car out of pocket.

Final thoughts on rental reimbursement coverage

Rental reimbursement coverage can be a valuable add-on to your auto insurance policy. Having rental reimbursement coverage gives you peace of mind, knowing that if your car is in the shop for an extended period, you won’t be left without transportation. It can help you maintain your daily routine and responsibilities without disruption.

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Shivani Gite
Contributing Writer


Shivani Gite is a personal finance and insurance writer with a degree in journalism and mass communication. She is passionate about making insurance topics easy to understand for people and helping them make better financial decisions.