If My Car Breaks Down, Will Insurance Cover a Rental?

If My Car Breaks Down, Will Insurance Cover a Rental? Perhaps you require a vehicle while yours is being repaired following a collision. Or perhaps you require a rented automobile to use while having your noisy transmission fixed. For a variety of circumstances, you might find yourself needing to hire a car on short notice. Still, even in the event of an accident that is covered by insurance, most standard auto insurance policies won’t pay the bill.

However, it’s frequently possible to supplement an existing auto insurance policy with rental car reimbursement coverage. Although it won’t always cover the cost of a rental automobile, it might provide enough of a benefit to make the relatively small additional cost worthwhile. We will discuss the circumstances under which your auto insurance might pay for the cost of a rental automobile as well as the distinction between rental car insurance and rental car reimbursement.

Rental Car Insurance vs. Rental Car Reimbursement

Although they may sound similar, rental car insurance and reimbursement coverage are two distinct forms of insurance. A hired vehicle is covered by rental car insurance. You might decide to purchase the rental car insurance provided by the rental company, for instance, if you borrow a car while on vacation. Usually, rental automobile insurance provides numerous different kinds of protection, such as:

  • Liability coverage covers the cost of losses you cause to another person or their property.
  • Personal accident insurance to pay your medical costs following a covered accident.
  • Personal effects coverage to cover personal belongings stolen from your rental automobile.
  • Loss-damage waiver coverage to cover damage to the rental vehicle.

You can add rental car reimbursement coverage as an endorsement or rider to your normal auto insurance policy. This coverage covers the expense of car rental while yours is being repaired if your vehicle is damaged in an accident.

When Does Insurance Cover the Costs of a Rental?

If another driver causes an accident in which your car is damaged, their property damage liability insurance should cover the cost of you renting a car while yours is being repaired. The insurance company, however, may place a time limit on how long it will cover the rental. According to studies from Enterprise2, it usually takes two weeks to fix a vehicle damaged in an accident. If your car is totaled, the insurer is not compelled to give you a rental car, although some do it out of politeness.

Your auto insurance should cover the cost of renting a car after a covered accident if it has a rental car reimbursement endorsement. There are a few restrictions on this coverage, though:

When your vehicle is out of commission for a covered repair, certain Mechanical Breakdown Insurance (MBI) policies will pay for a rented automobile. MBI coverage is available from some insurers as an add-on to conventional auto policies, and from some credit unions when you take out a loan for an automobile. You can also buy an MBI policy from companies that specialize in this type of auto protection.

When You Have to Pay for a Rental Car Yourself

Without mechanical breakdown insurance, you’ll be responsible for paying for a rental car if your car breaks down. Likewise, your collision insurance probably won’t pay for an accident that you caused. After all, insurance companies provide coverage for the cost of a rental car for that reason. Of course, you’ll be responsible for paying the fees when hiring a car while on vacation.

Do I Need to Insure My Rental Car? 

You may be able to insure a rented car under your personal auto insurance policy. When you cause an accident and are at fault, standard auto insurance policies provide bodily injury and property damage coverages to help cover the costs of another driver’s medical bills and motor repairs.

Your collision and comprehensive insurance may cover replacement costs or damages to a rental car if it’s stolen. Your homeowner’s policy might cover items stolen from a rental car, and your auto policy’s medical payments coverage might provide the same protection as the rental agency’s accident insurance. Your credit card might even offer rental car coverage.

Even if your auto insurance policy covers a rental automobile, it might still make sense to purchase insurance at the rental agency desk. Your personal auto policy’s deductible may be lower for rental car coverage, or there may be none at all.

If that’s the case, purchasing rental car insurance may enable you to avoid incurring further expenses in the event of an accident. Additionally, if your auto insurance only offers state-mandated minimum liability coverage, it can better protect you and assist you to avoid having to claim on your policy.

Frequently Asked Questions (FAQs)

What does rental car insurance cover?

Liability, loss damage waiver, personal accident, and personal effects coverages are frequently provided by rental automobile companies. These insurance policies typically align with personal injury protection, medical payments, bodily injury liability, property damage liability, collision, comprehensive, and personal auto insurance policies. Usually, you can choose which rental car insurance coverage you want.

Which credit cards cover car rental insurance?

Many credit cards provide some sort of rental car insurance. Before renting a car, find out what your credit card covers with your credit card company. The type of credit card you use and the bank issuing it can have a big impact on the level of protection supplied. Typically, credit cards only provide secondary protection, which means that your credit card’s protection won’t begin until your auto insurance policy or rental car insurance has run out of coverage options.

How old do you have to be to drive a rental car?

Each rental car company has its age limitations. While some only rent to those 21 or older, others allow drivers as young as 18 to do so. State-by-state age restrictions can also differ. Some businesses demand that drivers who are underage and 25 pay a surcharge, which can cost $25 or more per day.

How much car insurance do I need?

Minimum amounts of property damage liability and bodily injury liability coverage are required by state law. However, the majority of minimum standards don’t offer sufficient coverage to safeguard your investments. Carrying at least $100,000 in bodily injury coverage per person, $300,000 in bodily injury coverage per accident, and $100,000 in property damage coverage per accident is frequently advised by financial experts.

Other coverages, including medical costs, personal injury protection, and uninsured/underinsured motorist coverages, can also be mandated by your state. You might also need to buy collision and comprehensive coverages if you finance or lease a car.

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