Depending on the coverage in your policy, your auto insurance may be able to cover the costs of a replacement rental car if your car breaks down, as long as the damage was caused by a covered loss
Rental reimbursement coverage can help you pay for temporary transportation expenses, including a replacement rental car, but your coverage may be subject to limits
Other coverage options, like comprehensive and collision insurance, can offer financial protection for the body of your vehicle
If your car breaks down and the damage was caused by a covered loss, your auto insurance may be able to pay for temporary transportation expenses with certain supplemental coverage options, like rental reimbursement coverage. Rental reimbursement coverage will cover the cost of a replacement rental car while yours is being repaired.
However, mechanical breakdowns and routine maintenance are generally not covered by auto insurance, and you should expect to assume the costs for regular wear and tear or corrosion. That means that, if your car breaks down because of mechanical issues, even if you have rental car reimbursement coverage it will not cover the cost of a replacement rental car.
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Comprehensive coverage and collision coverage are additional insurance options you can add to your policy to protect the vehicle itself. And roadside assistance, which delivers emergency support if you’re stranded on the side of the road, can also help you keep your vehicle in tip-top shape.
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If you have rental reimbursement coverage, your auto insurance will pay for a replacement rental car if your own breaks down or is in the shop due to a covered loss. A covered loss is a claim or incident that is financially protected by coverage that is included in your policy. To find out what perils your policy does and does not cover, look at a copy of your policy or contact your insurance carrier.
Rental reimbursement coverage, also called substitute transportation coverage or car rental expense coverage, can help you pay for transportation expenses if your car is in an auto shop due to a covered loss. This can include public transportation fare or a replacement rental vehicle while yours undergoes repairs. But rental reimbursement generally does not cover rental vehicles for vacation purposes, and it won’t pay for a rental car during routine maintenance work on your vehicle.
Say you collide with an animal on the road. With comprehensive coverage, the costs of repairs to your vehicle would be covered, and because that counts as a covered loss, rental reimbursement would supplement that coverage by helping you pay for a rental car while you wait for yours to be fixed.
Rental reimbursement coverage is a relatively inexpensive add-on to your car insurance policy, and including it generally won’t raise your premiums significantly.
Your rental reimbursement coverage may be subject to limits, meaning the amount your insurer will pay per day for a covered claim. You’re typically given a daily limit and a maximum number of days it can be used, or an overall limit.
For example, your coverage may provide up to $25 per day for a maximum of 30 days or an overall payout of $1,000. That means your insurer will pay up to $25 per day for no more than 30 days or until your $1,000 limit has been reached.
If your rental car costs more than your rental reimbursement limit, or if you need to use it longer than the maximum days you’re allotted, you’d have to pay out of pocket for the costs that exceed your limits. Review your policy to see what your limits are, and speak to your insurer if you’d like to raise your coverage limits.
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Mechanical breakdowns and other regular maintenance issues are not covered by auto insurance, so you should expect to pay for mechanical repairs like regular wear and tear and corrosion on your own. A mechanical issue not caused by a covered peril, then, wouldn’t qualify you for rental reimbursement coverage. Rental reimbursement will only cover the cost of a rental car if your car needs repairs after a covered loss.
Regular maintenance and repairs may be paid-for if your car is still under warranty which is a guarantee made by your car’s manufacturer to cover the cost of certain mechanical repairs should you need them. Warranties typically last up to a certain number of miles or period of time, but are completely separate from your car insurance.
Liability car insurance covers damage to other people and their vehicles when you cause an accident. In all but two states, drivers are required to have the minimum amount of liability insurance, but the actual amount will vary by state. But there are types of coverage that pay for damage to your own vehicle.
Comprehensive and collision insurance are both optional, but will cover repairs to the body of your vehicle and are often paired together. Comp coverage protects your vehicle from damage inflicted by non-driving perils such as theft, vandalism, and extreme weather conditions. And as the name suggests, collision insurance covers physical damage to your vehicle when it collides with another car or object, no matter who was at fault.
If your car is in the shop for damage that was covered by your comp and collision coverage, then your rental reimbursement will kick in and pay for the cost of a rental car.
Depending on your carrier, roadside assistance, another additional coverage option, can cover the costs of towing your car to an auto repair shop or delivering fuel or a new battery in emergency situations. If you have collision coverage and comprehensive coverage, then your policy may include roadside assistance; but if it does not, it’s fairly easy and affordable to add.
Stephanie Nieves is an insurance editor at Policygenius in New York City, specializing in auto and home insurance. She's been writing about insurance, finance and financial planning since 2018, and loves helping readers get the knowledge they need to make financial decisions with confidence. Her words can also be found on PayScale, Fairygodboss, and The Muse.
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