When you think of rental car coverage, you may think of the insurance that protects you when renting a car on vacation. However, you may not realize that there are two types of rental car coverage. The first is insurance for a rental car. Specifically, the coverage, if any, on your current auto policy for a vehicle you rent. The second is rental reimbursement, or the amount insurance companies will reimburse you to rent a car while your car is being repaired after a loss. Here is a breakdown of what is covered by your State Farm policy and what you really need when you rent a car.
Insurance For Rental Cars
Anyone who has rented a car before has been confronted with the question of whether you should purchase the insurance offered by the rental company. How do you know what you need? Luckily, you won’t need much as a State Farm insured. Here is what they will cover.
Does State Farm Cover Rental Car Insurance?
The coverage you carry on your State Farm auto policy will extend to any car you rent, including car shares, like Turo. As long as you have comprehensive and collision coverage on your State Farm policy, it should cover the damage to that car. Of course, this is subject to the terms and conditions of your policy, such as the coverage territory.
This means that if you are renting a car internationally, outside of the U.S or Canada, you should purchase any coverage offered through that rental car company. In regards to larger vehicles you may rent, such as moving trucks, State Farm will also provide some coverage. Generally, trucks under a certain length can be covered, but it’s best to check with your State Farm agent to be sure.
Where coverage for a rental can become tricky is if you only carry liability. Without comprehensive and collision, sometimes called “full coverage,” you would have no protection for the rental car in an accident. In these cases, you would want to purchase the coverage offered by the rental car company. Here are a few other scenarios where getting covered through the rental company might be a good idea:
- You’re traveling for work, and your personal auto policy won’t cover the business exposure.
- You have comprehensive and collision coverage on your policy but have high deductibles.
- You are traveling internationally and outside your car insurer’s coverage territory.
- You don’t own a car and have no other car insurance to protect the rental vehicle.
- Your policy won’t cover any loss of income to the rental car. Loss of income means what the rental company would have earned if the rental wasn’t damaged. Some policies may cover this while others won’t. Your State Farm agent can tell you what your policy will pay, if anything.
It’s also important to note that any accidents you are involved in, regardless of the car you are driving, have the potential to show up on your driving record and affect your insurance. So it’s essential to drive safely, even in a rental.
Rental reimbursement may sometimes be referred to as Rental Car coverage, but it differs from the rental car coverage discussed above in that insurance companies will pay for you to rent a car while your car is being repaired after a loss. This coverage allows you to continue your daily activities without disruption after a loss and is an excellent addition to your auto policy.
Is Rental Car Coverage and Rental Reimbursement the Same Thing?
Unlike rental car coverage that is included with your policy purchase, rental reimbursement needs to be added on to your policy. It must be bought with comprehensive and collision coverage. Rental reimbursement only applies when your car is damaged due to a comprehensive or collision loss.
What is Rental Reimbursement From State Farm?
State Farm offers multiple rental reimbursement coverage levels, for an average coverage cost of $10 a month you can get $30 per day, up to $900 total. They also pay for travel expenses, such as hotels, meals, and transportation, if your vehicle is damaged more than 50 miles away from home.
The rental reimbursement options are broken down into a per-day/claim limit, usually in the following increments: $16/$400, $30/$900, or $50/$1,500. This means that State Farm would pay a certain amount per day, up to a maximum amount in total, for you to rent a car while your car is being repaired.
The cost for this coverage can vary, depending on which coverage option you choose, but the average at about $10 a month makes it a very affordable option. They also have partnerships with some rental car companies, meaning they can send the payment directly to them without you having to act as the intermediary.
Frequently Asked Questions
Does Full Coverage Include Rental Reimbursement?
While rental reimbursement coverage is not automatically included with comprehensive and collision coverages, you cannot purchase it without purchasing both. So be sure to specifically request this coverage when you are setting up your insurance policy.
Will State Farm Cover a Rental if My Car Breaks Down?
The rental reimbursement coverage only kicks in after a covered loss. For example, if you hit a pole and need to rent a car while yours is being repaired. Mechanical breakdown is not a covered peril, so State Farm would not pay for you to rent a car during this time. However, they may potentially cover the rental vehicle if anything were to happen, providing you carry physical damage coverage (comprehensive and collision) on your auto policy.
Do I Have to Pay for the Rental Car Myself?
As long as the rental car company you use is within State Farm’s network, you do not need to pay for the rental car yourself. State Farm will pay them directly. If you choose to use a company that is not in-network, you will have to pay them out of pocket and submit a reimbursement request through State Farm.
How Long Will Insurance Pay For a Rental Car?
The coverage period provided by rental reimbursement is typically up to 30 days, and the maximum amount allowed by the policy, whichever comes first. If your car is still not repaired after these 30 days, you will need to pay for the rental car out of pocket.
Should I Purchase Rental Reimbursement?
If you purchase physical damage coverage on your vehicle, it is a good idea also to buy rental reimbursement. But if your car is older or you have other vehicles at your disposal in the event you don’t have access to yours, then you may want to pass on this coverage.
Cara Carlone has been in the Insurance Industry for over 15 years with experience in both personal and commercial lines. She has an Underwriting background and holds her CPCU, API and AINS designations from The Institutes. She lives in Rhode Island with her husband and 3 daughters.