Rental Reimbursement Coverage on the Personal Auto Policy
Insurance polices can be confusing to read. Sometimes, there are additional coverages listed on your policy that are named in a confusing way. The way a coverage is named might cause you to assume that it does one thing, while the policy language explains the benefits of the coverage in a different way.
A great example of this would be Rental Reimbursement, sometimes called Transportation Expense. This is an optional coverage available on most auto policies.
There is a common misconception that Rental Reimbursement coverage can be used for vehicles that you rent for vacation or if your vehicle needs routine maintenance. However, Rental Reimbursement is an optional coverage that only comes into play after covered damage to your owned auto causes it to be unusable.
For example, assume you have been involved in a covered auto accident and you have Rental Reimbursement coverage on your auto policy. While your car is in the shop being repaired, Rental Reimbursement comes into play. It provides coverage for the cost of renting an auto while you’re unable to use your damaged vehicle.
Typically, Rental Reimbursement has these limits:
- Cost of a rental car up to a certain dollar amount per day
- Up to a certain number of days or up to a maximum total dollar amount
On your auto policy, it might look something like:
Rental Reimbursement: $50/day, 30 Days, $1,500 Maximum
This means that the Rental Reimbursement coverage will pay up to $50 each day for rental costs for 30 days or up to a maximum of $1,500 for the total rental vehicle cost, whichever comes first. If you need to keep the rental vehicle longer or the total cost exceeds the maximum dollar amount shown on the policy, typically you would be responsible for paying the additional costs out-of-pocket.
Rental Reimbursement is a valuable coverage and is often inexpensive. With the long wait-time for repairs and backordered parts, it is important to consider if you can afford to be without a vehicle for an extended period of time.
Call your agent today to find out if you have Rental Reimbursement included on your auto policy. They will work with you to determine how much it would cost to add the coverage and discuss the available coverage limits.