Under What Conditions Can You Get Reimbursed For Renting a Car?

April 11, 2024

If your car breaks down, it’s only natural to find a substitute until it is repaired.  “Can I get a rental car while my car is in the shop?” Of course, you can. Many drivers do so. 

In fact, the rental car market is flourishing, expected to reach almost $100 billion by the end of the year. Companies like National Car Rental offer 24/7 roadside assistance, rental reimbursement, and more perks to make your life comfortable, even if your favorite car is in repair.

Now, two more questions arise:

  • If my car breaks down, will insurance cover it? 
  • Will insurance pay for a rental car during repairs? 

Our experts will provide simple answers to these and other important questions.

Is It Worth Insuring a Rented Car?

Puzzling over whether it’s worth insuring a rented car is quite natural, as with anything that’s not your property. You might think you can live without rental car insurance, and you might be right, but not if you need peace of mind behind the wheel and protection against financial losses or legal liability.

Even though the rental car insurance prices may exceed your expectations – up to $60 daily – it might pay off in the sense that you will be protected through and through financially and morally.

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Source: Insurance Information Institute

Rental Car Reimbursement

Let’s imagine you have insured your rented car. The first thing that comes to your mind is: “Will the insurance reimburse the rent?”

There is no unanimous answer to this question. Rental car insurance and reimbursement of money spent on it are different services, although both are aimed at providing financial confidence in unforeseen situations. 

That’s why some companies include the reimbursement in the contract while increasing the insurance cost. However, most consider indemnity as an additional element of the policy to be negotiated.

Loss of Use vs. Rental Reimbursement

If your vehicle is involved in an accident and is now unfit for use, you have the right to obtain compensation for:

If you don’t have another means of transportation besides the car involved in the accident and don’t plan on renting a car, the company may reimburse you for the loss of use.

If renting a car is necessary, you can claim car rental reimbursement. To save costs, we recommend documenting the Collision Damage Waiver (CDW) – a waiver of damages you caused to the rental car during an accident.

And if you want to safeguard yourself to the brim, consider adding roadside assistance for a rental car. For owners of such insurance, service specialists are available 24/7 during the rental period to resolve possible road-related problems.

How To Obtain Car Rental Reimbursement

To obtain car rental reimbursement, make sure you:

  1. Informed the insurance company about the damages or accident that led to using the rented vehicle.
  2. Prepared documents related to the car rental, including insurance confirmation, expense receipts, etc.
  3. Filed a claim for rental car reimbursement with the insurance company.
  4. Checked the policy terms, especially the rental reimbursement clause, and rented a car that costs no more than the covered amount.
  5. Collaborated with the company’s experts to obtain current information about responsible parties, expense amounts, payers, etc.

Approach the matter seriously and attentively to receive car rental reimbursement without any issues.

Does Insurance Cover the Rental Costs?

Another natural question is, “If my car breaks down, will insurance cover a rental?” Typically, it depends on the terms of your insurance policy. However, there are specific cases where insurance does or does not cover car rental.

Let’s explore them in detail.

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When Rental Is Covered by Insurance

Regardless of the terms of your policy, some situations require the insurance company to cover the lease:

  • Accidents. You can claim rental car reimbursement if you are not at fault in an accident. It is a lengthy process, and you may have to cover some expenses out of pocket, which will be reimbursed later.
  • Theft. If you experience theft, coverage for a rental car during repairs will be provided according to the insurance contract.
  • Natural disasters. If your car requires repair due to earthquakes, hurricanes, tsunamis, lightning, etc., rental compensation will cover the rental expenses.
  • Damages caused by animals. Damages caused by animals (scratches, collisions) are fully covered, with the company covering only the vehicle’s damage.
  • Fire. If a fire leads to your car’s breakdown, rental expenses will be reimbursed. It is advisable to document the incident with photos or videos.

When Rental Is Not Covered by Insurance

On the contrary, there are cases when the insurance company will not pay you rent, even if you have indemnity coverage:

  • Mechanical issues with a vehicle unrelated to the covered incidents. If the cause of the car malfunction is a mechanical problem (tire replacement, brake or engine repair, fluid leakage), no rental compensation is provided.
  • Planned maintenance. Insurance does not cover rental expenses if the planned maintenance of your vehicle forces you to rent a car.
  • Need for rental during vacation. Insurance does not cover car rental during vacation. You can use special travel insurance to cover such expenses.

Overall, rental car insurance is a wise investment that protects you against unforeseen events and unplanned expenses. Remember that such insurance won’t cover expenses for renting a car during tourism, routine maintenance, and mechanical issues.

Contact your insurance agent to clarify the details, or consult with the experts at CoverExplore!

Frequently Asked Questions

Who is responsible if a rental car breaks down?

Responsibility during unforeseen situations is clearly outlined in the policy. In most cases, you will receive rental car reimbursement if you are not at fault in the incident.

Will insurance pay for a rental car during repairs?

Auto insurance covers the cost of a rental car during repairs of your vehicle. Check if this coverage is included in your policy, as it is an additional feature that can be added for a separate fee.

Does roadside assistance cover rental cars?

In the realm of rental car roadside assistance, it typically extends to jump-starting the vehicle, providing towing services, tire replacement, fuel provision, etc.

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Oleksandr Rohovnin is a Content Marketer at Phonexa.com and an expert contributor to CoverExplore. His passion is digital marketing, innovative technologies, tech industries, and – above all – distilling vast amounts of complex information into engrossing narratives anyone can relate to. At CoverExplore, Oleksandr stokes passion for auto insurance and the automotive industry in general in every story he curates.

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