Automobiles have become an essential part of many of our lives. We use them to commute to work, drop the kids off at soccer practice, and run errands. So when your vehicle is held up in the repair shop after an accident, it can quickly derail your schedule. In these cases, a rental car may be your only option. However, renting a car for several days – especially given the price hike from the pandemic – can quickly add up. This is where rental reimbursement coverage comes in handy. Let’s review this helpful addition to your policy and when it will help you out when in need.
What is Rental Reimbursement Coverage?
Most insurers offer rental reimbursement coverage as a rider to your existing auto insurance policy. For an increase to your premium, the insurance company will reimburse you for the cost of a rental car while auto body repairs are being made on your primary vehicle. Like many insurance products, rental reimbursement coverage is typically available with different daily and maximum coverage limits. For example, your insurer may offer a lower premium option that covers $25 per day for a maximum of $750, or you can opt for a higher premium offering that covers $100 daily with a $3,000 maximum.
When Does Rental Reimbursement Coverage Pay for a Rental?
While rental reimbursement coverage comes in handy when your car is briefly out of commission, there are circumstances where the insurer may require the time of repair or disablement to exceed a certain period before the reimbursement applies. Let’s take a look at some situations where a rental car may be necessary and whether rental reimbursement will be granted:
- Car Breakdown: If your car breaks down due to a mechanical failure or wear and tear, the insurer likely won’t cover a rental car, as you may need to purchase a new car.
- Covered Loss: Rental reimbursement only applies in the event of a covered loss, including a collision or situations covered by comprehensive auto insurance, such as a fire or theft.
- Not-at-Fault Accident: If you’re the victim of an accident that is not your fault, the responsibility of rental reimbursement is left to the at-fault driver’s carrier.
Before adding rental reimbursement to your insurance, it’s wise to go over your policy’s details with your independent agent to ensure you’re aware of your covered losses.
Is Rental Reimbursement Worth the Investment?
While you can’t predict how often you’ll require a rental car, this insurance rider can provide peace of mind that you’ll be able to afford transportation when your vehicle is in repair. It’s best to ask yourself how severely your life will be impacted should you have to go without an automobile for a certain number of days or weeks. You should also think about which type of vehicle you need; while an economy class car may only cost $30 a day, a pickup truck or SUV could range from $40 to a couple hundred. Regardless of your needs, rental reimbursement can cost as little as $2 to $15 per month.
Rental reimbursement coverage is an inexpensive means to ensure you’ll have a backup set of wheels at the ready should you get in an accident or incur another covered loss. It’s the perfect rider for drivers who can’t do without a vehicle while their car is being repaired. At TJ Woods Insurance, our expert agents can review your auto insurance with you and determine whether this add-on or any other riders would match your lifestyle. If you’re interested in padding your coverage with helpful additions such as rental reimbursement coverage, contact us today.
