Q

If my car breaks down, will insurance cover the costs of a replacement rental car?

A

With rental reimbursement coverage, your auto insurance will be able to help you pay for a replacement rental car. But mechanical breakdowns are generally not covered by auto insurance.

Stephanie Nieves author photoKara McGinley

By

Stephanie Nieves

Stephanie Nieves

Property and Casualty Insurance Expert

Stephanie Nieves is an insurance editor at Policygenius in New York City, specializing in home and auto insurance. Her work has appeared in Business Insider, PayScale, Fairygodboss, and The Muse.

&

Kara McGinley

Kara McGinley

Property and Casualty Insurance Expert

Kara McGinley is an insurance editor at Policygenius, specializing in home, auto, and renters insurance. She's been writing about insurance since 2019, and her work and insights have been referenced in Kiplinger and WRAL.com.

Updated June 2, 2021|5 min read

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If your car breaks down and the damage was caused by a covered loss, your auto insurance will pay for temporary transportation expenses as long as you have rental reimbursement coverage, which is usually a supplemental coverage option. Rental reimbursement coverage will cover the cost of a replacement rental car while yours is being repaired after a covered claim.

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 should 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 round out robust protection.

Key Takeaways

  • Your auto insurance may be able to cover the costs of a replacement rental as long as the damage to your car 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

When will insurance pay for a rental car?

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 covered under the terms 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 company. But generally, as long as rental reimbursement coverage is included in your policy, insurance will cover the cost of a rental car if your car is out of commission due to:

  • An accident with another car

  • Damage from extreme weather, like wind or hail

  • Damage from animals, like a mouse infestation or hitting a deer while driving 

  • Damage from falling objects

  • Fire or smoke damage

  • Theft

  • Vandalism

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What is rental reimbursement coverage?

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 fares or a replacement rental vehicle while yours undergoes repairs. But rental reimbursement 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 help you pay for a rental car while you wait for yours to be fixed.

Rental reimbursement coverage is optional, but it’s a relatively inexpensive add-on to your car insurance policy —including it generally won’t significantly raise your premiums

Rental reimbursement coverage limits

Your rental reimbursement coverage will be subject to limits, meaning the maximum 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.

When will insurance not pay for a rental car?

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. Rental reimbursement will only cover the cost of a rental car if your car needs repairs after a covered loss. That means that the cost of a rental car will not be covered if yours is in the shop for:

  • New tires

  • Engine failure

  • Faulty brakes

  • Fluid leakage

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.

Car insurance that covers your vehicle itself

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 coverage are both optional, but will cover repairs to the body of your vehicle and are often paired together. Comp coverage pays for damage inflicted by non-driving perils such as theft, vandalism, animals, fire, 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.

Frequently asked questions

Will at fault insurance pay for a rental car?

If you get into a car accident and the other driver is at fault, you will file what is called a third party claim. That means their insurance company will reimburse you for the damage to your vehicle. If your car needs repairs, the other party’s insurer may be obligated to pay for a rental car while your vehicle is in the shop.

How long will insurance pay for a rental car?

How long your insurance company will pay for a rental car depends on your rental reimbursement coverage limits. Your coverage may be set at a daily limit, like $40 a day for 30 days, or an overall maximum dollar amount, like $1,000. Contact your insurance company to learn what your rental coverage limits are and if you can increase them for an additional premium.

What happens if I get into an accident in a rental car?

If you get into an accident in a rental car, you should handle it the same way you would if you got into an accident in your own car — pull over, call 911, exchange information with the other driver, and document the accident with photos or videos. You should contact the rental car company to let them know you’ve been in an accident, depending on the company, they may provide towing or roadside assistance. The insurance company you’ll file a claim with will depend on if your own auto policy extended coverage to the rental car or if you purchased coverage through the rental car company.