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What is rental reimbursement?

Rental Reimbursement is an optional coverage that helps cover the costs of a rental car while it is being repaired due to a covered claim. Generally, you can retain the rental car until your damaged vehicle is repaired or your coverage maximum is exhausted, whichever comes first.

What is covered under rental reimbursement?

It's crucial to know what rental reimbursement covers and what it doesn't. It only covers the cost of a rental automobile while your car is being repaired due to a covered loss. Covered losses frequently overlap with accidents covered by your collision or comprehensive coverage, for example:

  • Accident with another vehicle
  • Colliding with a fixed object
  • On the road, colliding with deer or other wildlife

Please keep in mind that your insurance carrier will only pay you for the cost of the daily rental. Other costs, such as gas or the car's security deposit, are often your burden. It also won't cover the cost of a rental car while your car is in the shop for normal maintenance or while you're on vacation.

Car rental isn't the only choice. Companies sometimes allow you to put money toward public transportation instead of a rental automobile to keep daily limitations and motor insurance prices low.

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Rental reimbursement coverage limits

Rental automobile reimbursement coverage, like other types of insurance, has limitations. The majority of policies have daily and total claim limits.

  • The daily amount is the total amount your insurance company will pay for your rental car on a daily basis. Anything above that will be paid out of your own pocket.
  • The greatest amount you can be reimbursed for each accident is the total per claim amount. These could be a monetary value ($800) or a time limit (30 days). If you need a car for an extended period of time, these maximum limits can soon add up.
  • Some insurers provide multiple limit options, while others only provide one limit.

Examine local rates and evaluate how crucial it is to have access to a car to calculate the amount of coverage you require. If you just drive on weekends, you might not need much coverage. If you drive to work and back five days a week, you'll want to be sure you have enough rental reimbursement coverage for safe commuting.

Do you need rental reimbursement coverage?

If you don't have enough money in your budget to cover this additional expenditure, consider adding rental reimbursement insurance to your car insurance policy. It's especially useful if your automobile is going to be in the shop for an extended amount of time, which is tough to forecast when purchasing or renewing your insurance.

Because one of the most important variables in deciding how much a rental car costs is its location, you'll want to be sure the extra coverage is appropriate for your specific area. For example, suppose a $30 per day reimbursement limit costs $3 per month. If comparable cars in your city rent for $40 per day, you may need to increase the reimbursement coverage maximum or prepare to pay the difference.

Rental Reimbursement Cost

Location Economy Car Mid-size SUV
Los Angeles, CA $39-$52 $63-$94
Wichita, KS $51-$73 $67-$91
Newyork, NY $58-$85 $81-$173
Chicago, IL $41-$59 $69-$113
Columbus, OH $49-$61 $65-$86
Orlando, OL $33-$51 $79-$92

Coverage Limits and Rates of Top Companies

Monthly rental reimbursement coverage cost estimate for a 30-year-old guy in Indiana:

Company Reimbursement Coverage Estimate Rate
State Farm $25/day ($600 max per incident) $22.32
  $50/ day ($1200 max per incident) $38.16
  80% of the rental cost/ day ($1500 max per incident) $25.00
  $50/day and ($1500 max per incident) $53.16
Esurance $30/day and ($900 per incident) $60.00
  $40/ day and ($1200 per incident) $67.20
Nationwide $30/day and ($900 per incident) $47.40
  $40/ day and ($1200 per incident) $65.16
  $60/ day and ($1800 per incident) $102
  $75/ day and ($2250 per incident) $132

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How does rental reimbursement work?

When you're in an accident, the motorist who caused it is usually responsible for any damages. If someone hits your car and takes it to the shop, their insurance may cover the repairs as well as the rental car you'll use while your car is being repaired, but this isn't guaranteed.

If you cause the accident, your liability insurance will cover the cost of the other driver's rental automobile. However, unless you have collision coverage, you'll be stuck with the price of repairing your own car and paying for a rental car while you wait.

You can add rental reimbursement coverage to your insurance with these choices in place. Because the other driver pays for your rental if it's their fault, rental reimbursement only applies if it's your fault and you have collision or comprehensive coverage.

In other words, if your car is in the shop and your insurance is paying for it, it will also pay for your rental car if you have coverage.

Rental reimbursement coverage when you’re not at fault

If someone else was at fault, their insurance company is responsible for paying for your rental. A third-party automobile insurance policy may not cover the entire cost of the rental and usually has a time limit, so you may still be responsible for some costs. However, the other party's insurance may take a few days to work out the specifics and obtain you a rental automobile. In some cases, it may be preferable to rent an automobile on your own and have the other insurer compensate you.

Your auto policy should cover your rental for collision and comprehensive damage, so you shouldn't need to acquire additional coverage from your insurance company. Always double-check with the source.

What happens when a fault is contested?

The matter can become more complicated if you and the other driver disagree with the police report following an accident. You can contact your insurer and set up a rental if you have rental reimbursement coverage. If it is later established that the other motorist was at fault, your insurance company can work with them to obtain reimbursement.

You'll have to wait to see if you can claim back the cost of a rental automobile if you don't have rental car reimbursement insurance. You'll be responsible for the rental if the collision is proven to be your fault. If the other motorist is at fault, you'll deal with their insurance company to get the money you've already spent refunded.

Auto Insurance Data Methodology

The auto insurance rates published in this guide are based on the results of research completed by’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.

Quotes are typically based on a full coverage policy average unless otherwise noted within the content.

These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with


Is rental car reimbursement coverage worth it?

Rental reimbursement coverage is worth considering if you don't have alternate transportation (such as a second car or someone to take you around).

Rental reimbursement covers car rentals as well as other modes of transportation such as bus and subway fares. It's a reasonably reasonable plan that will cost you between $25 and $100 every year, depending on the amount of coverage you get. It's not worth acquiring coverage you won't use if you don't require a rental car or public transportation while your car is being repaired.

Can I add rental reimbursement after an accident?

You can submit a claim against someone else's motor liability insurance for both your automobile repairs and a rental car while the repairs are being made. In the industry, this is known as a third-party loss of use claim.

Even if you didn't rent a car, you may be able to sue the other motorist for loss of usage (rental car charges) in several areas.

Because you're claiming against someone else's insurance, it makes no difference if you have rental reimbursement coverage on your own policy.

How much is rental reimbursement coverage?

Rental car reimbursement is normally an extra $35–$60 per year ($2–$5 per month) on top of your automobile insurance policy's comprehensive/collision coverage. The amount is normally insignificant, but if your profession or daily life necessitates the use of a car on a regular basis, it may provide welcome peace of mind. This is often a standard addition to a commercial auto insurance policy if your firm owns multiple company vehicles.

However, for some, the extra $35–$60 a year over the course of ten years or more may be more expensive than paying out-of-pocket for one accident (assuming the average person is in a car accident once every ten years).

When you compare the typical cost of a rental automobile over a two-week period to the cost over a ten-year period, you may determine whether or not to invest in additional coverage.

You should also factor in the cost of transportation if you don't have a backup vehicle while yours is being repaired. Will you have to take public transit or use a ridesharing service? This should also be considered before making your decision (and help you determine how much coverage you need).

Do you need rental reimbursement coverage?

The value of rental reimbursement policy is dependent on your lifestyle because it is an optional automobile insurance plan. If you don't have any other transportation options, you might want to consider adding this coverage to your policy. You may not need the extra price if you think you could get by on your own, have easy access to public transit, or have a readily available vehicle to borrow.

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