What is Rental Reimbursement Coverage?

If you are in an accident that is covered by your insurance policy and your car gets too damaged to drive, rental reimbursement coverage helps you cover the costs of a rental vehicle.

Rental reimbursement coverage, which is an optional coverage you can add to your policy, pays for a rental vehicle up to a certain amount per day for a set number of days. You generally need collision and comprehensive coverage as part of your policy to get rental reimbursement.

For example, let’s say you were in a car crash. Collision coverage helps offset the costs of vehicle repairs or replacement if the accident is covered. But while your car is in the shop, you may need to rent a car if you commute or drive regularly. Rental reimbursement coverage helps with this expense.

If you’d like to explore car insurance options that include rental reimbursement coverage, contact Illinois Vehicle Insurance Agency, LLC (Illinois Vehicle). Illinois Vehicle helps drivers in the Chicagoland area find budget-friendly car insurance.

Why add rental reimbursement to your auto insurance policy?

Drivers who choose rental reimbursement coverage often do so for these reasons:

It reduces out-of-pocket rental costs: If the accident is covered by the insurance provider, rental reimbursement can help lessen costs. Unless you have the budget set aside to rent a vehicle in case of an accident or event, dealing with an unexpected expense may be stressful.
It keeps you mobile: Whether you commute to work, school, or drive often, not having a vehicle can be a big inconvenience. Having the option to rent a car after a covered accident can make the situation less stressful.
It’s an affordable add-on that can help you save money during unexpected repairs: Depending on the accident, your car could be in the shop for days or even weeks. If parts need to be replaced or ordered, repair times could be long. Rental reimbursement coverage is a budget-friendly option that can help reduce the total expense of renting a car.

How rental car reimbursement works

Rental reimbursement coverage generally kicks in after scenarios covered by the driver’s collision or comprehensive coverages. These are optional coverages that go beyond the Illinois-required liability coverage.

Collision coverage helps pay for the costs of repairs or replacement of your vehicle after a covered collision. Comprehensive coverage, on the other hand, deals with events other than a crash, such as:

Theft
Vandalism
Extreme weather events
Animals damaging your car
Falling objects (like tree branches or hail)

Here are some examples where you could benefit from a rental reimbursement add-on in your car insurance policy:

Your vehicle was totaled in a covered crash. While the replacement process is underway, rental reimbursement coverage helps pay for a rental car.
Your car window was broken in a covered vandalism event. While the window gets replaced, you can use a rental car paid for by this add-on (up to a specified amount).
During a severe storm, a tree falls on your car. Depending on the needed repairs, your vehicle may be in the shop for days. Rental reimbursement helps you continue to drive with a reimbursed rental car.

Remember that for rental reimbursement coverage to kick in, your car insurance policy has to cover the accident.

How is reimbursement paid?

Depending on your policy and insurer, there are different ways you can get reimbursed. Some insurance companies work with car agencies that allow direct billing. With others, you can submit receipts and get reimbursed, according to the Illinois Insurance Association.

What's covered under rental reimbursement coverage?

As mentioned above, rental reimbursement coverage kicks in after your car is out of use due to repairs or replacement after an event covered by your collision or comprehensive coverage.

Daily limits vary depending on the amount and time specified on your policy. Some insurers, for example, may cover $30 a day for 30 days. Others may cover $75 for 40 days. While you build your car insurance policy, talk with your preferred insurance agent to discuss your preferred limits. Illinois Vehicle’s agents are happy to help drivers choose a car insurance option that works for them, including rental reimbursement coverage.

Some insurance companies may cover other transportation expenses, depending on your policy. These include taxis, ride-share services, or public transportation.

The coverage typically lasts while your car is in the shop due to the covered accident or event. If you need to rent a car for a different reason, for example, if you want to go on a road trip and don’t want to add mileage to your own vehicle, you’ll need to pay for a rental out of pocket.

What’s not covered by rental reimbursement coverage

Rental reimbursement doesn’t cover mechanical breakdowns or routine maintenance. For example, if your engine overheats and needs replacement, and you need a rental vehicle, this coverage generally won’t cover that expense.

To know whether the rental is covered, ask if the accident or event falls under your collision or comprehensive coverages (if you’ve added them to your policy). These are usually crashes with other vehicles or still objects (like a fence), theft, vandalism, etc. If the event isn’t covered by your insurance policy, rental reimbursement coverage won’t apply.

Additionally, if the rental goes beyond the time limit set in your policy, you most likely will have to pay for the additional rental days. For instance, if you get rental reimbursement as an add-on on your car insurance policy and the time limit is 30 days, but you need a rental for 35 days, the last five days will be at your own expense.

Frequently asked questions (FAQs)

How much does rental reimbursement coverage cost?

Prices vary by state and insurance company. Rates can be as low as $27 a year and go as high as $90 a year, according to Forbes.

Can I use it for any rental car company?

This depends on the insurance company you choose. Generally, insurers work with most major car rental companies. Others may partner with a select car rental company, making the billing process smoother.

Does it cover luxury or specialty vehicles?

Since your policy will have a daily limit on how much you can spend on your rental car, luxury or specialty vehicles aren’t usually covered. Unless the vehicle listed in your policy was a luxury or specialty vehicle, most insurers won’t cover this car category.

Is rental car reimbursement coverage the same as rental car insurance?

They are different. Here’s a quick snapshot to help you differentiate between them:

Rental reimbursement coverage helps pay for a rental vehicle while your car is being repaired or replaced. It applies to accidents or events covered by your insurance policy.
Rental car insurance is a type of insurance you get when you rent a car. For example, if you travel to another city and rent a car there, the rental company may offer car insurance to cover the vehicle.

Get rental reimbursement coverage with Illinois Vehicle

Looking to add rental reimbursement to your policy but don’t know where to start? Our Spanish-bilingual agents work with drivers to help them choose a car insurance option that works for their budget and needs. Call 630-581-4805, visit one of our Chicagoland locations, or get a free car insurance quote online.

Disclaimer:
This material is for general informational purposes only. The products, services, and discounts referenced herein are not available in all states or from all companies. All statements are subject to the terms, exclusions, and conditions of the applicable policy. In all cases, the actual language of the policy contract prevails. Coverage is subject to individual policyholders meeting the insurer's underwriting qualifications and state availability. Other terms, conditions, and exclusions may apply.