Dealing with car repairs after an accident can be stressful. One common concern is finding transportation while your vehicle is in the shop. If you have rental reimbursement coverage, your auto insurance may pay for a rental car after an accident for up to 30 days. However, not all insurance policies include rental reimbursement, and there are specific limitations to be aware of.

Will Insurance Pay for a Rental Car After an Accident?

Insurance will cover a rental car after an accident if you’ve added rental reimbursement coverage to your auto policy. This coverage helps pay for a rental car while your vehicle undergoes repairs for a covered loss. Keep in mind that rental reimbursement is not automatically included in standard auto insurance policies. Adding this coverage usually costs between $2 to $15 per month, and you must have comprehensive and collision coverage to qualify.

How Does Rental Reimbursement Work?

Rental reimbursement covers the cost of renting a car while your vehicle is being repaired due to an accident. This coverage does not apply to maintenance or repairs that are unrelated to an insurance claim. To understand what qualifies for rental reimbursement, review your insurance policy or contact your agent.

Insurance companies often set limits on how much they will pay per day and per claim for a rental car. For example, they might cap the daily reimbursement at $50 and the total reimbursement at $1,500 per claim, for a maximum of 30 days. Your rental reimbursement coverage ends when your car repairs are complete. If you keep the rental car after repairs are done, you will need to cover the extra days out of pocket.

Do You Choose Your Rental Car?

The process of renting a car with insurance reimbursement can vary depending on your insurer. Some insurance companies allow you to rent a car from any company, meaning you’ll need to pay upfront and then request reimbursement. Other insurers require you to use a rental company within their network, which simplifies the process since the insurer pays the rental company directly. If the rental cost exceeds your policy’s cap, you are responsible for the difference.

How Long Will Insurance Pay for a Rental Car After an Accident?

Most rental reimbursement coverages are capped at 30 days. This duration typically suffices, as the average car repair takes about two weeks. However, in some situations, insurance may cover a rental car for longer. For example, if your insurer arranges the rental and approves the repair facility, they may extend coverage to match the duration of repairs.

If another party’s insurance is responsible for covering your repairs, using your own policy’s rental reimbursement can be faster. You generally don’t have to pay a separate deductible for rental reimbursement, but you will still need to pay your deductible for the repair work itself.

Rental Reimbursement Limits

Before adding rental reimbursement coverage to your policy, it’s essential to understand its limitations:

• Daily reimbursement limits: Insurers often cover a specific dollar amount or percentage of the rental cost per day. For instance, they may cover $30 per day or 80% of the daily rental cost. This is usually enough for a basic economy car, but it may not cover a larger vehicle, like a pickup truck. If you need a bigger rental, you might need to pay the difference.
• Per-loss reimbursement limits: These limits are typically a dollar amount, such as a maximum of $1,000 per covered loss. If your rental costs exceed this amount, you’ll need to cover the extra cost.
• Coverage duration: Rental reimbursement usually lasts for a maximum of 30 days.

The Bottom Line

Knowing how long insurance will cover a rental car after an accident helps you plan better and avoid additional costs. Rental reimbursement coverage can be a valuable addition to your auto insurance policy, especially if you expect your vehicle to be in the shop for an extended period. To reduce the cost of this coverage, consider shopping around for car insurance quotes and finding ways to lower your premiums. Good financial habits, like paying bills on time and keeping credit utilization low, can also help you save on insurance.

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