What is car rental reimbursement insurance, and should I buy it??

Rental reimbursement is an optional car insurance product that reimburses you for the cost of renting a car while your vehicle is in the shop for repairs following an accident.

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The coverage is fairly inexpensive -- about $1 to $2 a month, according to the Insurance Information Institute. Generally rental reimbursement reimburses you for car rental up to a certain daily limit, such as $25, and up to a certain amount per accident. The coverage kicks in only if your car was damaged and is undergoing repairs from an incident covered by your collision or comprehensive car insurance. It does not pay for a rental car if your vehicle breaks down or is in the shop for ordinary maintenance or repairs.

Collision and comprehensive insurance are also optional forms of coverage. Collision covers damage to your car caused by traffic accidents, and comprehensive insurance covers damage from other causes, such as natural disasters and vandalism. Comprehensive insurance also covers the car if it's stolen.

Whether you should buy rental reimbursement coverage depends on how desperately you need access to a car and how much car rental would dent your monthly budget. You probably could forego the coverage if you have another car that you can use without inconveniencing anyone else in your household. But if you depend on just one car, then rental reimbursement might be worth considering. A vehicle can be in the shop for more than a week or two after a bad accident. The cost of renting a car could quickly add up to a few hundred dollars.

Ask about rental reimbursement when you get auto insurance quotes, and evaluate your situation to decide if the coverage is worth the price. Don't forget to check the coverage limits before deciding.

For more, see "Are you buying too much car insurance?"