Will Insurance Pay for a Rental Car During Repairs? – Here’s What You Should Know
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Let’s say you’re cruising along, coffee in hand, enjoying your favorite podcast—and suddenly, out of nowhere, BAM! A fender bender throws your day (and your car) completely off track. Everyone’s safe, thank goodness, but your vehicle? It’s now a regular visitor at the local body shop. And just like that, you’re facing a new dilemma: How am I supposed to get around while it’s being fixed?
If you’re like most people, your first thought probably is, “Will my insurance pay for a rental car?” Well, here’s the deal—it’s a great question, but the answer, annoyingly, isn’t a simple yes or no. Like so much else in finance (and life), the real answer is: it depends. Let’s have a closer look and break this down, step by step.
Will Your Insurance Cover a Rental Car While Your Car Is in the Shop?
Short answer? Yes—but only if you have rental reimbursement coverage.
How Does Rental Reimbursement Coverage Work?
Insurance companies offer something called rental reimbursement coverage. The thing is: this coverage isn’t automatically part of your policy. It’s usually an optional add-on that comes with a slightly higher premium.
So, here’s what you need to know about rental reimbursement coverage:
It kicks in only after your car sustains damage covered by your collision or comprehensive insurance—things like accidents, theft, vandalism, or even weather events.
Some policies even include alternative transportation options (think buses or taxis) if renting a car isn’t practical.
Don’t be fooled by the term “full coverage.” Despite sounding comprehensive, it usually just means your policy includes liability, collision, and comprehensive insurance—not necessarily rental reimburse ment.
When Will Your Insurance Pay for Your Rental?
The most common scenario is pretty straightforward: If your car is damaged by something your collision or comprehensive insurance covers, rental reimbursement kicks in. Collision coverage takes care of accidents with other vehicles or objects, while comprehensive coverage is all about those unexpected surprises like theft, vandalism, or hitting a deer on your weekend getaway.
But let’s say someone else caused the accident. Ideally, their liability insurance will step in to cover your rental costs. The problem? Relying on someone else’s insurance can sometimes feel like waiting in line at the DMV—slow, frustrating, and full of paperwork.
Here’s a pro tip from personal experience: even if another driver is at fault, tapping into your own rental reimbursement coverage can often be quicker and far less stressful. Your insurer then usually deals directly with the other party’s insurance company to get reimbursed. This saves you the headache of chasing down claims adjusters or arguing about fault.
Situations Where You’re Probably Out of Luck
Unfortunately, rental reimbursement isn’t a magic wand. It won’t rescue you in every situation. For example, if your engine gives out due to wear-and-tear, your insurance will politely but firmly say, “Sorry, that’s on you.” Routine repairs and maintenance—think oil changes or new brake pads—aren’t covered either. And, as tempting as it sounds, rental reimbursement won’t cover your car rental expenses on vacation.
Also, make sure to double-check if you have multiple vehicles on the same policy. If only one of them has rental reimbursement and another vehicle ends up in the shop, coverage won’t magically transfer over.
To simplify things, here’s a quick overview:
| Covered Scenarios ✅ | Not Covered Scenarios ❌ |
|---|---|
| Accidents (if collision coverage applies) | Routine maintenance (oil changes, brakes) |
| Theft, vandalism, or severe weather (if comprehensive coverage applies) | Mechanical breakdowns unrelated to a covered event |
| Damage caused by another at-fault driver | Renting a car while traveling or on vacation |
How to File a Rental Reimbursement Claim
Alright, so the unfortunate happened—your car’s stuck in the repair shop, and you’re about to dip into your rental reimbursement coverage. Let’s walk through exactly what to expect so you’re not stuck wandering around clueless at the rental counter (been there, done that with a friend of mine—it’s not fun).
The claim process typically works like this:
Report the Accident Immediately
First: call your insurance company ASAP. Waiting around never helped anyone, and it definitely won’t speed up your rental process.
Confirm Your Coverage
Double-check your policy documents or call your insurer to confirm:
Do you even have rental reimbursement?
What’s your daily and total claim limit?
Believe me, finding out you max out at $30 per day while staring down a rental SUV at $85/day is a painful way to learn about your coverage limits.
Choose Your Rental Company (Wisely)
Your insurer probably has partnerships with rental companies like Enterprise or Hertz, which typically means a smoother billing process.
Pro tip: using a “preferred provider” usually means your insurer pays them directly—no receipts, no reimbursements, no hassle.
Sure, you can pick a different company, but fair warning: you’ll likely need to pay upfront and get reimbursed later.
Pre-Authorization Might Be Required
Some insurers want you to get pre-approval before you rent a vehicle. So don’t show up with keys already in hand and expect reimbursement without checking in first. It’s a quick call—do yourself the favor.
Keep Every Receipt and Agreement
You should think of receipts as your golden tickets—without them, your insurer won’t reimburse you. Seriously, keep them in a safe spot or snap a quick photo with your phone.
How Reimbursement Actually Happens
There are two scenarios here:
Direct Billing
Your insurer pays the rental company directly (preferred providers make this easy).
Pay & Submit
You pay upfront, submit receipts, and wait for reimbursement (slower, but common if you went rogue and chose your own rental place).
Know Your Rental Coverage Limits
Even if you do have rental reimbursement, it’s not an unlimited golden ticket. Your policy typically comes with specific limits:
Daily Limit: Usually between $30–$50 per day. If you pick a more expensive rental, the extra costs come straight out of your wallet.
Total Claim Limit: Often capped between $900–$1,500 total, meaning coverage typically lasts about 30 days, or until your car is repaired—whichever comes first.
If your car is declared a total loss, the rental reimbursement often ends sooner.
Also, rental reimbursement typically covers only the base rental fee. Extra expenses like gas, insurance upsells, or deposits aren’t included, so factor these into your budget.
For clarity, here’s a quick summary:
| Rental Reimbursement Typically Covers | Usually NOT Covered |
|---|---|
| Base rental car cost | Fuel and additional mileage fees |
| A rental car after a covered loss | Security deposits and rental insurance |
| Daily limit (approx. $30-$50) | Rental cars during vacations |
| Maximum rental period (around 30 days) | Mechanical breakdowns or routine repairs |
Is Rental Reimbursement Coverage Worth It?
Adding rental reimbursement coverage usually costs somewhere between $2 and $15 a month. For the price of one Starbucks latte (maybe two, if you’re feeling fancy), you get serious peace of mind. It’s that classic insurance trade-off: a small guaranteed expense to avoid a potentially hefty surprise down the line.
Pros
Convenience and peace of mind—never underestimate these.
Quicker process compared to dealing with another driver’s insurer.
Protects your budget against unexpected rental costs.
Cons
You might pay for coverage you never use.
Coverage might not fully cover extended repairs or pricier rental options.
Ultimately, whether rental reimbursement makes sense for you comes down to your personal financial situation, how much you depend on your car, and how much you value the safety net. For me, knowing I won’t get stuck paying $800 out-of-pocket for a rental after an accident is worth the extra few dollars each month. But everyone’s financial calculus is different.
What if You Don’t Have Rental Reimbursement Coverage?
Now, if you’re one of the many people who skipped the rental reimbursement option (by the way, no judgment at all—saving money is always tempting), you’re probably wondering, “Am I out of luck?” Fortunately, there are still some solid alternatives you can explore:
Option 1: The Other Driver’s Insurance
If someone else caused the accident, their liability insurance should ideally cover your rental expenses. Usually, their insurer will provide you with a comparable vehicle while yours is in the shop. But—and it’s a big one—don’t expect a smooth ride here. From personal experience, relying on someone else’s insurance is about as quick as the line at Costco on a Sunday afternoon: slow, stressful, and often frustratingly bureaucratic.
Option 2: Your Own Uninsured/Underinsured Motorist Coverage
Let’s say the at-fault driver doesn’t have sufficient coverage—or worse, none at all. If you opted for Uninsured/Underinsured Motorist Property Damage (UMPD) coverage (and many people do without realizing it), it could kick in to help cover your rental. This coverage isn’t always automatic, though, so check your policy carefully.
Option 3: Credit Card Rental Coverage
Here’s one people overlook all the time: your credit card’s rental car insurance benefit. Yes, really! Many cards, especially premium ones, provide rental car coverage as a perk, as long as you use that card to pay for the rental. But pay attention here, because there’s an important catch:
Primary coverage means the card’s coverage pays first, without involving your own insurance. (This is the one you want!)
Secondary coverage only pays after your personal auto insurance handles the claim, leaving you potentially dealing with deductibles or premium hikes.
Usually, to activate this perk, you’ll need to decline the rental company’s Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). And a heads-up: not all cards are created equal. Popular cards known for strong rental coverage include the Chase Sapphire Reserve and the Platinum Card from American Express, but always verify the fine print before counting on it.
Option 4: Loaner Vehicles from Repair Shops
It’s not a guaranteed fix, but always ask your dealership or repair shop about loaner cars. Some dealerships offer courtesy vehicles while your car is undergoing repairs. It might not be a Tesla Model S, but I mean—anything beats borrowing your uncle’s suspiciously shaky pickup truck.
Option 5: Extended Warranties (Vehicle Service Contracts)
Some extended warranties, those dealership extras often pitched when you’re signing paperwork on your new ride, offer rental car reimbursement for certain mechanical issues—not accidents. Keep in mind, though, they’re often limited in scope, so read the fine print closely.
Option 6: Roadside Assistance Programs (AAA, Allstate, etc.)
If you have premium roadside assistance—like AAA’s higher tiers—you might be surprised to find rental car discounts or reimbursement as part of the package. For instance:
AAA Repair Assurance Plans include alternate transportation reimbursement.
Companies like Allstate and Good Sam sometimes have similar perks.
These won’t cover everything, but discounts can save you enough to ease the pain of renting.
Option 7: Mechanical Breakdown Insurance
Mechanical breakdown insurance is a standalone coverage option specifically meant for mechanical failures. It sometimes includes rental car reimbursement. But just like other alternatives, check those conditions—because there will always be a few sneaky exclusions.
Rental Coverage Comparison: Which One Fits Your Needs?
To make it all a bit easier to digest, here’s an overview of the different options, what they cover, and when they make the most sense.
| Coverage Type | What It Covers | Typical Limitations | Cost | Best For |
|---|---|---|---|---|
| Rental Reimbursement (Auto Insurance Add-On) | Covers rental car or alternative transportation (public transit, taxis, etc.) if your car is being repaired for a covered accident. | Daily and total limits apply - Usually excludes fuel, deposits, and rental insurance | Typically $2–$15/month | Drivers who want a safety net for accident-related repairs. |
| Extended Warranty (Vehicle Service Contract) | Reimburses rental car costs while your car is being repaired for covered mechanical issues. | Applies only to specific repairs - May require a deductible | Varies based on plan and vehicle | Owners with manufacturer or third-party warranties that cover major repairs. |
| Roadside Assistance (AAA, Allstate, etc.) | Some plans offer rental car discounts or limited rental reimbursement for covered breakdowns. | Coverage is often limited to short-term rentals - May only apply to certain breakdown scenarios | Annual membership fee (varies by tier) | Road-trippers and drivers who want emergency roadside protection with occasional rental perks. |
| Credit Card Benefits | Covers damage or theft of a rental car if you pay with the card (primary or secondary coverage). | Doesn’t cover mechanical breakdowns or accidents involving your personal car - Must decline the rental company’s CDW/LDW | Free as a cardholder perk (annual fees may apply for some cards) | Frequent renters looking to avoid using personal auto insurance for rental claims. |
| Mechanical Breakdown Insurance (MBI) | Covers mechanical repairs and sometimes provides rental reimbursement while those repairs are happening. | Covers mechanical failures, not accidents - Deductibles may apply | Additional premium to auto insurance policy | Owners of newer vehicles looking for an alternative to extended warranties. |
Which Option Should You Choose?
If your car is in the shop after an accident → Rental reimbursement through auto insurance is your best bet.
If your car breaks down due to mechanical issues → Check your extended warranty or mechanical breakdown insurance.
If you’re renting a car while traveling → A credit card with rental car protection can save you from paying for extra insurance at the counter.
If you’re stranded on the side of the road → A roadside assistance plan (like AAA) might offer some reimbursement or discounts.
Final Thoughts (My Two Cents)
So, bottom line: Will insurance pay for your rental car during repairs? Usually, yes—if you’ve planned ahead and have rental reimbursement coverage. But there are limits, exclusions, and a bit of fine print you should know.
That’s why I’ve created a simple recap (perfect for screenshots, just saying):
| ✅ DO THIS | ❌ DON’T DO THIS |
|---|---|
| Check your policy ASAP | Assume you’re covered (you might not be!) |
| Consider adding rental reimbursement | Ignore it if your car is essential |
| Know your daily/total coverage limits | Rent a luxury car you can’t afford |
| Understand the exclusions clearly | Expect coverage for maintenance issues |
| Explore alternatives (credit cards, AAA) | Rely solely on the other driver’s insurer |
| Keep receipts and communicate clearly | Lose paperwork |
Adding rental reimbursement typically costs just $2 to $15 per month—that’s less than most people’s daily coffee habit. For me, it’s a no-brainer. Paying a little extra each month is worth the peace of mind knowing I won’t be stranded or stuck footing a surprise bill if something goes wrong.
But I am well aware that everyone’s financial situation is unique. Maybe you have multiple cars or live in a city with amazing public transit (lucky you!). Ultimately, consider how much you rely on your car, your tolerance for unexpected costs, and your overall budget before making the call.
And whatever you decide, at least now you’re informed—no surprises, no stress, and definitely no overpriced rental SUVs ruining your financial day.
Now, I want to hear from you! Have you ever been stuck without rental coverage after an accident? Or did rental reimbursement save you from a major headache? Drop a comment below and let’s talk about it.
And if you enjoy breaking down personal finance topics like this, make sure to subscribe to my newsletter—where I cover smart money moves, investing strategies, and tips to avoid unnecessary expenses. Because the best way to save money? Knowing the hidden costs before they hit your wallet.
Thank you very much for reading! Take care, and see you around.
FAQ
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No—rental car coverage is not automatically included in standard auto insurance policies. You need to have rental reimbursement coverage as an optional add-on for your insurer to cover rental costs after a covered accident. If you don’t have it, you’ll have to pay for the rental out of pocket.
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The quickest way to check is by looking at your policy documents or calling your insurance provider. It’s usually listed under “Rental Reimbursement” or “Transportation Expense Coverage.” If you don’t see it—or never actively added it to your policy—chances are you don’t have it.
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Most policies have a daily limit (e.g., $30–$50 per day) and a total limit (e.g., $900–$1,500 per claim). If your rental costs exceed these limits, you’ll need to cover the difference. Coverage usually lasts up to 30 days or until your car is repaired—whichever comes first.
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No, rental reimbursement only covers the base rental cost. Expenses like gas, security deposits, additional rental insurance, or mileage fees are on you.
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Not exactly. Your insurance will typically cover a comparable vehicle to your own. If you drive a sedan, don’t expect coverage for a luxury SUV or sports car. Some insurers allow upgrades if you pay the difference out of pocket.
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Yes, if the other driver is at fault, their liability insurance should cover your rental car expenses. However, this process can take time—and if there’s any dispute over fault, you could be left waiting. That’s why many people use their own rental reimbursement coverage first, then let their insurer get reimbursed from the at-fault driver’s policy later.
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It depends. If your car is declared a total loss, most policies stop rental coverage once the insurance company makes a settlement offer—which can be much sooner than 30 days. You may need to return the rental quickly or start paying out of pocket.
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Not for this situation. Credit card rental insurance only covers damage or theft of a rental car—it won’t cover the cost of a rental while your personal car is being repaired. However, some cards offer rental discounts, which can still help reduce costs.
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No—rental reimbursement only applies to rentals after a covered accident. If your car is in the shop for an oil change, new brakes, or a mechanical failure that isn’t accident-related, this coverage won’t apply. However, if you have an extended warranty or mechanical breakdown insurance, those might help cover a rental in certain situations.
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For most drivers, yes—especially if you rely on your car daily. Since rental reimbursement typically costs between $2 and $15 per month, it’s a small price to pay, in my opinion, compared to potentially spending hundreds of dollars out of pocket for a rental after an accident.
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