Will Insurance Pay for Rental Car During Repairs

Yes, your auto insurance may pay for a rental car during repairs—but only if you have rental reimbursement coverage. This optional add-on helps cover daily rental costs while your vehicle is in the shop after an accident. Without it, you’ll likely foot the bill yourself.

Key Takeaways

• Rental reimbursement coverage is optional: Most standard policies don’t include it unless you specifically add it.
• Only applies to covered claims: Your car must be damaged in a covered incident (like a collision or comprehensive event) for rental coverage to kick in.
• Daily and total limits apply: Policies cap how much they’ll pay per day (e.g., $30–$50) and for how many days (e.g., 10–30 days).
• Not all repairs qualify: Routine maintenance, wear-and-tear, or mechanical breakdowns usually aren’t covered.
• File your claim promptly: Delaying can slow down approval and rental authorization.
• Use approved rental companies: Some insurers require you to rent from specific partners to get full reimbursement.
• Check your policy details: Always review your declarations page or call your agent to confirm coverage limits and conditions.

Will Insurance Pay for Rental Car During Repairs? Here’s What You Need to Know

Picture this: You’re driving home from work when another car runs a red light and T-bones your sedan. Your airbags deploy, the front end is crumpled, and your car is towed to a repair shop. Now what? You still need to get to work, pick up the kids, and run errands—but your vehicle won’t be ready for at least two weeks. Do you have to pay out of pocket for a rental car while it’s being fixed?

The short answer? Maybe. But only if you’ve added rental reimbursement coverage to your auto insurance policy.

Many drivers assume that because they pay for comprehensive or collision coverage, their insurer will automatically cover a rental car during repairs. Unfortunately, that’s not how it works. Rental car coverage is a separate, optional add-on—and without it, you’re on the hook for transportation costs while your car is in the shop.

In this guide, we’ll walk you through everything you need to know about whether your insurance will pay for a rental car during repairs. We’ll explain what rental reimbursement is, how it works, when it applies, and how to make sure you’re prepared before an accident happens. Whether you’re a new driver or have been behind the wheel for decades, understanding this often-overlooked part of your policy can save you hundreds—or even thousands—of dollars in unexpected expenses.

What Is Rental Reimbursement Coverage?

Rental reimbursement coverage—sometimes called “rental car coverage” or “loss of use” coverage—is an optional add-on to your auto insurance policy that helps pay for a rental vehicle while your car is being repaired after a covered claim.

Think of it like a backup plan for your transportation needs. If your vehicle is damaged in an accident, stolen, vandalized, or affected by a covered natural disaster (like hail or flooding), and it needs to be in the shop for repairs, this coverage kicks in to help cover the cost of renting a replacement car.

It’s important to note that rental reimbursement doesn’t cover every type of repair. It only applies when the damage is the result of a covered event under your policy. For example:

– A collision with another vehicle or object (covered under collision coverage)
– Theft or vandalism (covered under comprehensive coverage)
– Weather-related damage like hail, flooding, or falling trees (also comprehensive)

If your car breaks down due to a mechanical failure, needs routine maintenance, or is damaged because of normal wear and tear, rental reimbursement won’t apply. Those situations fall outside the scope of standard auto insurance.

How Does Rental Reimbursement Work?

When you file a claim for a covered incident, your insurer will assess the damage and authorize repairs. If your policy includes rental reimbursement, they’ll also approve a rental car for you—usually through a partner rental company like Enterprise, Hertz, or Avis.

Here’s how the process typically works:

1. **File your claim** – Report the accident or damage to your insurer as soon as possible.
2. **Get an estimate** – An adjuster will inspect your vehicle and determine repair costs.
3. **Rental authorization** – If repairs are approved and your policy includes rental coverage, the insurer will authorize a rental car.
4. **Pick up your rental** – You’ll be directed to a nearby rental location (often one partnered with your insurer).
5. **Use the rental while repairs are done** – You drive the rental until your car is fixed and ready for pickup.
6. **Return the rental** – Once your vehicle is repaired, you return the rental and resume driving your own car.

Your insurer will pay the rental company directly—up to the limits of your policy. Any amount over those limits comes out of your pocket.

What Does Rental Reimbursement Cover?

Rental reimbursement typically covers the daily cost of renting a vehicle that’s similar in size and class to your own. For example, if you drive a midsize sedan, your rental will likely be a comparable sedan—not a luxury SUV or sports car.

Most policies also include a daily limit (e.g., $30, $40, or $50 per day) and a total limit (e.g., $900 or 30 days). So if your daily limit is $40 and you rent a car for 15 days, your insurer will pay up to $600. If the actual rental costs $45 per day ($675 total), you’ll pay the $75 difference.

Some policies may also cover additional rental-related expenses, such as:

– Taxes and fees
– Fuel (though you’re usually expected to return the car with a full tank)
– Basic insurance on the rental (though your personal policy often extends to rentals)

However, extras like GPS rentals, child seats, or premium upgrades are usually not covered.

When Does Insurance Pay for a Rental Car?

Now that you understand what rental reimbursement is, let’s talk about when it actually applies. Not every repair situation qualifies—even if you have the coverage.

Covered Incidents That Qualify

Your insurance will pay for a rental car during repairs if the damage results from a covered event. These typically include:

– **Collision**: Damage from hitting another vehicle, object, or rolling your car.
– **Comprehensive**: Damage from non-collision events like theft, vandalism, fire, hail, flooding, or animal strikes.
– **Hit-and-run or uninsured motorist claims**: If another driver damages your car and flees (or is uninsured), and you have uninsured motorist coverage, rental reimbursement may apply.

For example, if a tree falls on your car during a storm, comprehensive coverage will pay for repairs—and if you have rental reimbursement, it will also cover a rental while the damage is fixed.

Situations That Don’t Qualify

There are several common scenarios where rental reimbursement won’t apply—even if your car is in the shop:

– **Mechanical breakdowns**: If your transmission fails or your engine overheats due to age or lack of maintenance, this isn’t covered by standard auto insurance.
– **Routine maintenance**: Oil changes, brake replacements, tire rotations, and other regular upkeep aren’t covered.
– **Wear and tear**: Damage that occurs gradually over time (like rust or worn suspension parts) isn’t considered a covered loss.
– **Pre-existing damage**: If your car already had damage before the incident, repairs for that older damage won’t qualify.
– **Non-covered perils**: If your policy excludes certain events (like flooding in a basic plan), related repairs won’t trigger rental coverage.

It’s also worth noting that if you’re at fault in an accident and don’t have collision coverage, your insurer won’t pay for repairs—or a rental car—even if you have rental reimbursement. The coverage only applies when your policy covers the damage.

What If the Other Driver Is At Fault?

If another driver causes the accident and is found at fault, their liability insurance should cover your rental car during repairs—not your own policy.

Here’s how it works:

1. You file a claim with the at-fault driver’s insurance company.
2. They assess liability and approve repairs for your vehicle.
3. They also authorize a rental car for you while your car is being fixed.

In this case, you don’t need rental reimbursement coverage on your own policy—the other driver’s insurer handles everything. However, there’s a catch: the process can take time. The at-fault insurer may delay approval, dispute liability, or take weeks to authorize a rental.

That’s why many drivers choose to use their own rental reimbursement coverage first—even if the other driver is at fault. Your insurer can get you into a rental quickly, and then they’ll seek reimbursement from the at-fault party later (a process called subrogation). This way, you’re not stuck waiting weeks without transportation.

How Much Does Rental Reimbursement Cost?

Adding rental reimbursement to your auto insurance policy is surprisingly affordable—especially compared to the cost of renting a car out of pocket.

On average, rental reimbursement costs between $5 and $15 per month, depending on your insurer, location, driving record, and the coverage limits you choose.

For example:
– A $30/day limit with a 10-day maximum might cost $7/month.
– A $50/day limit with a 30-day maximum could cost $12/month.

Given that renting a car can easily cost $40–$80 per day, paying $10/month for peace of mind is a smart investment—especially if you rely heavily on your vehicle for work, school, or family responsibilities.

Choosing the Right Coverage Limits

When adding rental reimbursement, you’ll need to decide on two key limits:

1. **Daily limit**: How much the insurer will pay per day (e.g., $30, $40, $50).
2. **Total limit**: The maximum number of days or total dollar amount (e.g., 10 days, 30 days, or $1,500).

Consider your daily transportation needs and typical repair times. Most minor repairs take 3–7 days, while major collisions can take 2–4 weeks. If you drive a common vehicle, repairs may be faster due to parts availability. But if you have a rare or luxury car, repairs could take much longer.

A good rule of thumb: choose a daily limit that covers at least 80% of rental costs in your area, and a total limit that allows for 2–3 weeks of rental use.

Is It Worth Adding Rental Reimbursement?

For most drivers, yes—especially if you don’t have another reliable vehicle at home.

Ask yourself:
– Do I rely on my car for work, school, or childcare?
– Would I struggle to afford a rental if my car was out of commission?
– Do I live in an area with limited public transportation?

If you answered “yes” to any of these, rental reimbursement is likely worth the small monthly cost. It’s a form of financial protection that can prevent major stress and unexpected expenses after an accident.

Even if you have a second car, rental reimbursement can still be useful. For example, if both cars are damaged in the same incident (like a hailstorm), or if your backup vehicle is already in use, having rental coverage ensures you’re never stranded.

How to File a Rental Car Claim

If you’ve been in an accident and need a rental car, here’s how to file a claim and get approved quickly.

Step 1: Report the Incident Immediately

Call your insurance company as soon as possible after the accident—even if it’s late at night or on the weekend. Most insurers have 24/7 claims lines.

Provide:
– Date, time, and location of the incident
– Description of what happened
– Names and contact info of other drivers (if applicable)
– Photos of the damage
– Police report number (if one was filed)

The sooner you report, the faster your claim can be processed—and the sooner you can get into a rental.

Step 2: Get a Damage Estimate

Your insurer will assign an adjuster to inspect your vehicle. This may happen at a repair shop, your home, or a drive-in claims center.

The adjuster will:
– Assess the damage
– Determine if it’s covered under your policy
– Estimate repair costs
– Authorize repairs (if approved)

If your policy includes rental reimbursement and the damage is covered, the adjuster will also approve a rental car.

Step 3: Choose a Rental Company

Most insurers have partnerships with major rental companies like Enterprise, Hertz, or Avis. They’ll direct you to a nearby location and often arrange for the rental to be ready when you arrive.

Using an approved rental company ensures:
– Faster processing
– Direct billing (you don’t pay upfront)
– Coverage within your policy limits

If you choose a non-approved rental company, you may have to pay out of pocket and submit receipts for reimbursement—which can delay payment.

Step 4: Use the Rental and Return It

Drive the rental while your car is being repaired. Be sure to:
– Return it on time (usually when your car is ready)
– Fill the gas tank
– Avoid excessive wear or damage

If repairs take longer than expected, contact your insurer to request an extension. Most policies allow for reasonable delays, but you may need to provide documentation (like a repair shop update).

Common Mistakes to Avoid

Even with rental reimbursement, things can go wrong if you’re not careful. Here are common pitfalls to avoid:

Assuming Coverage Exists

Don’t assume your policy includes rental reimbursement just because you have collision or comprehensive coverage. Check your declarations page or call your agent to confirm.

Waiting Too Long to File

Delays in reporting can slow down approval and rental authorization. File your claim within 24–48 hours of the incident.

Choosing a Rental Outside Policy Limits

Renting a luxury car or SUV when your policy only covers economy vehicles? You’ll pay the difference. Stick to a comparable class.

Ignoring Daily or Total Limits

If your policy covers $30/day and you rent a $50/day car, you’ll owe $20/day. Know your limits before you rent.

Not Keeping Records

Save all rental agreements, receipts, and communication with your insurer. These may be needed for reimbursement or disputes.

Tips to Maximize Your Rental Coverage

Want to get the most out of your rental reimbursement? Follow these practical tips:

– **Review your policy annually**: Make sure your coverage limits still meet your needs.
– **Ask about discounts**: Some insurers offer discounts for bundling rental reimbursement with other coverages.
– **Use your own credit card**: Many credit cards offer rental car insurance as a benefit—use it to cover deductibles or gaps.
– **Stay in touch with your repair shop**: Get regular updates on repair progress to avoid unexpected delays.
– **Consider gap coverage**: If you lease or finance your car, gap insurance can help cover rental costs if your vehicle is totaled.

Final Thoughts: Be Prepared Before You Need It

Accidents happen—but they don’t have to derail your life. Understanding whether your insurance will pay for a rental car during repairs is a crucial part of being a smart, prepared driver.

Rental reimbursement coverage is a small investment that can make a big difference when you’re facing unexpected repairs. It gives you peace of mind, keeps you mobile, and protects your budget from surprise rental costs.

Don’t wait until your car is in the shop to find out what your policy covers. Take a few minutes today to review your auto insurance declarations page or call your agent. Confirm whether you have rental reimbursement, check your daily and total limits, and consider adding it if you don’t already have it.

Because when life throws you a curveball—like a fender bender or hailstorm—you’ll be glad you planned ahead.

Frequently Asked Questions

Does liability insurance cover rental cars during repairs?

No, liability insurance only covers damage you cause to others—not your own vehicle or rental needs. You’ll need collision, comprehensive, and rental reimbursement coverage for rental car expenses.

Can I choose any rental car company?

Most insurers require you to use approved rental partners for direct billing and faster service. Using non-approved companies may require you to pay upfront and seek reimbursement.

What if my car is totaled? Will I still get a rental?

Yes—if your car is declared a total loss and you have rental reimbursement, your insurer will cover a rental until you receive your settlement or purchase a replacement vehicle, up to your policy limits.

Does rental coverage apply if my car is stolen?

Yes, if you have comprehensive coverage and rental reimbursement, your insurer will pay for a rental car while your vehicle is missing—and even after it’s recovered if it needs repairs.

How long does it take to get a rental car approved?

If you have rental reimbursement and file promptly, most insurers can authorize a rental within 24–48 hours—sometimes the same day.

Can I add rental reimbursement after an accident?

No, you must have the coverage in place before the incident occurs. Adding it after an accident won’t apply retroactively.