If you’re involved in a car accident, you’re likely going to be without your car for a period while it’s being repaired. Since you’ll probably still need a car, you might have to rent one while yours is being repaired. Luckily, your car insurance may help to pay the cost of renting a car.
Rental Reimbursement Coverage
A standard personal auto insurance policy does not pay for the cost of renting a car, but you can add an optional coverage that will help pay for your rental car expense. This coverage is commonly called Rental Reimbursement or Transportation Expense coverage. In most cases, this coverage will pay up to a set dollar amount per day (usually $30 or $50) to cover the cost of renting a car. Instead of paying a set dollar amount, some insurance companies will pay a percentage (usually 80%) of the cost of renting a car. Typically, the set dollar amount is the preferred option because it will likely cover the entire cost of the rental car without an additional out of pocket expense. Also, in most cases, this optional coverage will provide coverage for the number of days your car takes to be repaired, up to a 30-day maximum. This coverage is optional and is not included with a basic auto insurance policy so it’s important to check with your agent/broker to make sure your policy includes this coverage.
Do I Need to Buy the Insurance or Damage Waiver for my Rental Car?
Most rental car companies will offer insurance or a damage waiver for an additional daily cost. In most situations, your auto insurance will provide coverage for the rental car which makes it unnecessary to purchase the additional coverage from the rental car company. Most personal auto insurance policies issued in the state of New York will extend coverage to a rented private passenger vehicle with a load capacity of less than 2,000 lbs and rented/driven in the United States, US Territories and Canada. If you’re renting a commercial vehicle or if you’re renting/driving the rental vehicle outside of the United States, US Territories or Canada, you’ll most likely want to purchase the additional insurance and/or damage waiver. Not all policies are created equal so please check with your agent/broker to determine if your policy provides coverage for your rental vehicle.
Next Steps
Whether you’re insured with our office or not, please call us at 518-278-2999. We’ll either be able to assist you with your existing policy or provide you options for a new policy that better fits your needs.
John Lofrumento, CFP®, FSCP®, RICP®
President, The Lofrumento Agency
Clifton Park, NY / Ballston Lake, NY