Will insurance pay for a rental car during repairs?

Your insurance company will pay for a rental car while your vehicle is being repaired under certain circumstances:

  • You must have purchased rental reimbursement coverage. This is usually an extra coverage you can add to your policy.
  • The damage to your car is covered by your car insurance under the collision or comprehensive portion of your policy. This might be damage due to a car accident, a tree falling on your car or even vandalism. Your insurance won’t pay for a rental, however, if your car is in the shop because it broke down due to mechanical failure.

Some insurance companies require you to pay the rental company and then submit receipts for reimbursement. Other companies are directly billed by the rental company, so you don’t have to pay out of pocket.

What is rental reimbursement, and how does it work?

Rental reimbursement is an additional coverage you purchase and add to your existing car insurance policy. When you initially purchase your car insurance, you must opt for and pay for this coverage. If you buy a policy online, look carefully at what you're purchasing, as it’s not always automatically part of the policy. Even full coverage insurance doesn’t automatically include this. Make sure you’ve added it if you want it.

Rental reimbursement allows a specific dollar amount to be paid out each day toward a rental car for a certain amount of time. Generally, this is about $30 to $50 a day for 30 days. Other insurance companies cap it at a total dollar amount. For instance, they may allow $35 a day for a max of $1,500. Some insurers allow you to pay a little more for a higher daily allowance or less for a lower daily allowance.

“Some policies exclude certain types of rental vehicles, such as luxury cars and trucks,” says Deng. 

You’ll be able to rent a sedan or SUV suitable for getting you to work and errands. If you want a fancier rental, you can pay out of pocket for the difference. 

You may have to pay the rental car company and then submit receipts to your insurance company for reimbursement. Some insurers can be directly billed by the rental car company, which makes it easier for you. 

People ask

Can I get a rental car through my insurance?

Yes, you can get a rental car through your insurance if you have already opted for rental reimbursement coverage. If your vehicle is in the shop for damage covered by your insurance, rental reimbursement pays a daily allowance for a rental car.

Who pays for a rental car after an accident?

After an accident, who pays for the rental car may depend on who is found to be at fault. If the other driver is at fault, you can file a claim against their liability insurance. Sometimes, it takes a little longer for the claim to be processed and the payout to go through. If you are at fault, your insurance will pay if you have the right coverage.

Either way, you can file the claim with your own insurance, which is often the quickest route. 

You won't have to pay a deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. for the rental car; you'll only be subject to the deductible for your comprehensive or collision coverageCollision coverage helps pay for repairs or replacement of your car if it's damaged in an accident, regardless of who is at fault and is subject to a deductible..

How long will insurance pay for a rental car after an accident?

Depending on the car insurance carrierAn insurance carrier is the company that provides your car insurance policy and pays claims., you might have a set time limit for how long they will pay for the rental car, generally 30 days. Sometimes, the policy sets a maximum dollar amount you can spend on a rental car, such as $1,000. So whichever comes first, the 30 days or the $1,000, will determine how long your rental car is covered.

How long will insurance pay for a rental car after a total loss?

If your car is a total loss after an accident, the insurance company may only pay for a rental car for a limited time. You should start shopping immediately for a new vehicle. It will also depend on how quickly your insurance company settles with you. Some insurers pay for a rental after a total loss for only a week, others for 30 days, so make sure you ask.

When doesn’t insurance cover a rental car?

Insurance doesn’t cover a rental car in a few situations. If you experience mechanical failure, you’ll have to pay for a rental car out of pocket. Why? These are not repairs your car insurance would typically cover; therefore, they also would not cover a rental car.

You must add this coverage before an accident. If you add it after the accident, you won’t be reimbursed for a rental car this time. You'll be covered next time.

Rental reimbursement does not cover a car you rent while on vacation. It’s only designed to pay for rental cars while yours is in the shop.

Rental reimbursement does not cover fuel and mileage; it only covers the cost of the actual daily rental rate.

Deng also warns that luxury vehicles, trucks and vehicles used for commercial purposes or work may be excluded from your insurance coverage. Always check with your insurance company to see exactly what’s covered.

How to get a rental car through insurance

If you need a rental car because yours is in the shop, call your insurance company first. They will let you know all the details of your policy, what's covered and what rental car agencies they work with. You can do all of this at the time you put in a claim for the damage on your regular vehicle.

If you decide to rent a car from a place your insurance company has a relationship with, they may set everything up for you and get billed directly by that rental car agency. This is the easiest and quickest route. Also, you won’t have to pay out of pocket and then provide receipts and wait to get reimbursed.

You always have the option of finding your own rental car. Remember, there will be a daily rate that your insurance company is willing to pay out for the rental. If you exceed that, you’ll be on the hook for the difference.

Rental car insurance: FAQ

Does full coverage insurance cover rental cars?

No, not unless you have opted for rental reimbursement coverage.

Does insurance cover a rental car when my car is in the shop?

If your car is in the shop for something your car insurance covers, yes. It doesn’t cover mechanical failure, however.

How do I rent a car through insurance?

Your first call should be to your insurer. Confirm what’s covered and what rental car companies they work with. They may be able to set everything up for you.

Tip iconHelpful auto insurance tools and calculators