After a car accident, you have enough things to worry about. Getting to work the next day shouldn’t be one of them.
We’ve all been there—and arranging alternate transportation while your vehicle is in a repair shop can be a hassle. But rental reimbursement coverage can help alleviate some stress after an accident while also saving you money.
Here are seven things you should know about before buying rental car reimbursement coverage:
1. It’s optional.
Rental reimbursement coverage does not automatically apply
after an accident. As an optional coverage, it must be purchased
separately. A common misconception is that auto insurance automatically
covers the cost of a replacement rental car. In reality, you often have
to select this coverage and apply it to the policy.
2. There is a limit.
You’ll likely have a per day and per occurrence limit. For
example, if you have a 25/750 limit, your insurance company will pay up
to $25 per day but no more than $750 per claim for the rental vehicle.
Most insurance companies will offer several different options, allowing
you to choose the limit that is right for you.
3. Your vehicle must be in the shop due to a covered loss.
Rental reimbursement coverage can be used while your vehicle is
being repaired after an accident or another covered loss, not for
routine maintenance or leisure. So, if your car is at the body shop
after an accident, a rental car is covered up to your limit. But if your
car is undergoing routine maintenance that will keep it in the shop
overnight or you are renting a vehicle for a family road trip, then
rental reimbursement coverage would not apply.
4. You can use it right away.
After reporting a claim, if your vehicle isn’t drivable, you
can be authorized for a rental car right away. Otherwise, you will be
relying on the at-fault driver’s insurance company, and you may have to
wait a little while before they can assess the claim and agree to pay
for a rental car. With rental reimbursement coverage, there’s no
waiting.
5. No need to worry about additional insurance.
For the most part, when you have collision and comprehensive
coverages in your auto insurance policy, it will transfer to the rental
vehicle, eliminating the need to purchase additional coverage from the
car rental agency. Check with your Grange agent, who will be able to tell you when this applies.
6. You may not need it at all.
If you have access to another vehicle, rideshare service or
public transportation in the event your vehicle isn’t drivable, you may
not need rental reimbursement coverage. But if you prefer the safety net
of having a rental available if you need it, you may want to opt-in to
this coverage.
7. It costs less than you might expect.
One year of rental reimbursement coverage will typically cost less than one day of out-of-pocket rental car expenses.