Have you been in an accident and now you need a rental car? Or perhaps you got into an accident while you were in a rented car?
In this article, we will detail the difference between rental car insurance and rental car reimbursement insurance, first-hand experiences from a licensed insurance agent, and some tips and tricks to help you if you’ve been in an accident and need a rental car!
Keep reading to get the answers to your rental car insurance questions.
Adding Rental Car Insurance After An Accident
You can add rental car insurance after an accident, but it will not provide any benefits for incidents before the date the coverage starts. For this reason, periodically review your car insurance with a qualified agent.
But, if you have been in an accident, fear not! There are other ways to get a rental car paid for by an insurance company after an accident.
Pro Tip: If you’ve been in an accident that was not your fault, and the person who hit you has insurance, you can file a claim with their insurance company to request a rental car.
When calling the opposing insurance company (the company of the person who hit you) make sure to have the following information handy:
- The name of the person who hit you
- Their insurance policy number
- A police report number (if available)
If the insurance company provides a rental car to you, they will only do so for a limited amount of time. Be sure to ask them the specifics on your daily monetary limit for a rental car and how long you will be able to keep it.
Pro Tip: If you need to pay out of pocket for a rental car after an accident, you can get a discount by informing the rental car agency that this rental is due to an insurance claim.
You can even ask your insurance agent to help too!
I’ve been able to broker lower rates for my clients by calling rental car agencies myself, explaining the situation, and asking if they will lower rates. And guess what? They often do!
Remember, it’s always a good idea to ask for a discount!
If you’ve been in an accident and don’t have rental car insurance, then you will be responsible for paying for the cost of a rental car while your car is in the shop.
Rental Car Insurance vs Rental Car Reimbursement
Both of these terms are often confused and for good reason! They sound similar but have completely different meanings.
Many times, while working as an insurance agent, I’ve noticed that clients use both terms synonymously.
But they aren’t the same insurance coverage. Rental Car Insurance and Rental Car Reimbursement are two different coverages and here’s how!
What is Rental Car Insurance?
Rental Car Insurance is an insurance policy that covers an accident while driving a rented car. This is the coverage that would pay to repair a rental car in the case of a total or partial loss.
For instance, if you are driving a rental car and bump into a tree, Rental Car Insurance would pay for the rental car’s bumper repair (less any deductible).
Pro Tip: Your existing automobile insurance policy may cover an accident while driving a rental car if you have full coverage. Before renting a vehicle, call your licensed insurance agent and ask if your coverage will “extend” to a rental vehicle.
What is Rental Reimbursement Coverage?
Rental Car Reimbursement Coverage is insurance coverage provided to help pay for the daily costs of a rental car if you are in an accident and need a rental car.
This is the coverage most think about when “Rental Car Insurance” comes to mind!
The proper way to refer to the insurance coverage that pays for the daily cost of a rental car is Rental Reimbursement Coverage.
How to Get a Rental Car After an Insurance Claim
After the policyholder has filed their claim with their auto insurance, they should keep in mind these tips for getting a rental vehicle and avoiding overpaying:
- Many insurance companies have rental car company partnerships for their insurance benefit. This means that the rental car company can bill your auto insurance directly.
- If a policyholder chooses a different rental car company than the one their insurance has a partnership with, the policyholder will have to pay upfront for the rental and file for reimbursement from their insurance provider.
- Tell the rental car company that your rental is related to an accident. Most rental car companies offer a discounted rental rate in these circumstances.
How to Add Rental Car Reimbursement to your Insurance Policy
To add Rental Car Reimbursement to your policy, contact an agent or existing insurance company to add the coverage. Please note that to have rental reimbursement insurance, policyholders must have collision and comprehensive coverage (often called “full coverage”).
How Long Does Insurance Pay for a Rental Car After an Accident?
How long insurance pays for a rental car after an accident depends on elected coverage amounts.
There are two amounts listed in policies that impact rental car reimbursement:
- Daily Limit
- Per Claim Limit
An example of coverage limits would be $40/$1,200.
This means that if you are in a claim and need a rental car, your insurance coverage would provide up to $40 of insurance coverage per day (enough to currently rent a mid-size sedan).
The $1,200 portion of the coverage limit is the max the insurance company will pay for a rental car over time.
Pro Tip: You can choose to rent a car that costs more than what the insurance company is providing but you will be responsible for the difference.
How Much Does it Cost to Rent A Vehicle After an Accident?
We charted the lowest advertised rates using Expedia. We listed the lowest rate in each state’s largest city (and surrounding area).
This estimate will give readers a better idea of the coverage needs in their area.
Pro Tip: Rental Car Reimbursement policies do not cover gasoline or other transportation costs from the rental car.
|State||Largest City||Lowest Rental Rate per day (Expedia)||Company|
|District of Columbia||Washington||$33||Dollar|
|New York||New York||$72||Avis|
|South Dakota||Sioux Falls||$51||Hertz|
|Utah||Salt Lake City||$28||Nu Car Rental|
Frequently Asked Questions
Can Rental Insurance be added to a rental car after pick-up?
Most rental car companies allow renters to add insurance to their rental agreement after pick-up with one major caveat: they must return to the rental counter for a damage inspection before adding protection.
Do I need Rental Reimbursement on my auto insurance?
Rental Reimbursement on auto insurance is a wise type of coverage to have. It costs a small amount extra on each month’s premium and will cover a significant amount of the cost to rent a vehicle during repairs.
(2019). 500 Largest US Cities, By State and Population. CDC. Retrieved December 2, 2022, from https://www.cdc.gov/places/about/500-cities-2016-2019/pdfs/500-cities-by-state.pdf
(2022). Rental Cars. Expedia. Retrieved December 2, 2022, from https://www.expedia.com/Cars?langid=1033&semcid=US.B.GOOGLE.BT-c-EN.CAR&semdtl=a111416148122.b1124095815666.r1.g1kwd-2444866548.i1.d1581806123172.e1c.j19007794.k1.f1.n1.l1g.h1e.m1&gclid=Cj0KCQiA4aacBhCUARIsAI55maHoxe3I4b3ubLbF1WRl4BiuvLAh3WyUWUQvLGJwbZCR3QEhz4FWifgaAqrgEALw_wcB
(2022). What Is Rental Reimbursement Auto Insurance? Forbes Advisor. Retrieved December 2, 2022, from https://www.forbes.com/advisor/car-insurance/rental-reimbursement/
Jesse Cunningham V is a professional writer and licensed insurance agent. He has worked in the insurance industry in different capacities, starting as a customer service representative and working his way up to an independent agency owner. He is licensed in the states of Maryland and Pennsylvania for Property, Casualty, Life, and Health products. Jesse has worked with many national carriers, including Nationwide, State Farm, Travelers, and Liberty Mutual, and specializes in car and home insurance and health, life, accidental death, and disability insurance. He writes for multiple publications including FIXD and Bauple.com. All articles by Jesse are opinion-based. Speak with your licensed insurance agent about the particulars of your insurance before making any decisions.