Should You Purchase Rental Car Reimbursement Coverage

When you purchase auto insurance coverage, you will be asked to select from a list of coverage options.

You know that you should get such auto insurance coverage basics as bodily injury and liability coverage, but what about the other coverage options?

One of the auto insurance coverage options you will have the option to add to your auto insurance policy is rental car reimbursement coverage.

What is Rental Car Reimbursement Coverage?

Rental car reimbursement coverage will cover the costs of renting a car while the policyholder's vehicle is being repaired, provided the repairs also are covered by the insurance policy.

Generally, a component of a policy's comprehensive or collision coverage, the rental car reimbursement coverage add-on can cost between $20 and $60 every six months.

The amount of coverage provided by the rental car reimbursement coverage is typically conveyed as a dollar limit per day plus a maximum amount. For example, if the policyholder had a 30/900 rental reimbursement coverage limit, he or she would receive $30 per day reimbursement for a rental car, with a maximum of $900 reimbursement.

As noted above, rental car reimbursement coverage only applies to situations in which the policyholder's vehicle is being repaired because of a covered accident. You will not be able to use rental car reimbursement coverage to rent a vehicle while your car or truck is in the shop because of a mechanical failure or normal wear and tear.

What is the Benefit of Rental Car Reimbursement Coverage?

The main benefit of carrying rental car reimbursement coverage is the fact that you will have access to a rental car if your car or truck is not drivable following an accident. The cost of paying $40 to $120 per year for the coverage is relatively low compared to the actual costs to rent a vehicle for an extended period of time.

According to the U.S. Bureau of Transportation Statistics, the average amount of repair time a vehicle requires after an auto-related accident is two weeks so you could wind up spending more than $300 just to rent an economy car for that period of time - more than double what you might spend for one year of coverage.

Does Everyone Need Rental Car Reimbursement Coverage?

While rental car reimbursement coverage might make sense for many people, the reality is that not everyone needs to carry this auto insurance coverage option.

For example, if you have a second vehicle in your family that you would be able to use should your primary car or truck need repairs, then you might not need to worry about rental car reimbursement coverage.

Additionally, individuals who drive certain luxury vehicles, such as BMW or Mercedes, can secure a loaner vehicle from their dealership in many cases. And many other economy car dealerships are starting to include the provision of a loaner car into sales agreements as an added incentive. For this reason, it is important to check with the dealership where you purchased your vehicle to find out if you do have this loaner car option before purchasing rental car reimbursement coverage.