Rental reimbursement coverage is an optional add-on that pays for a rental car, and sometimes other transportation, while your car is being repaired after a covered claim. It usually has a daily limit and a per-claim limit, and it generally applies only when the damage is covered under your collision or comprehensive coverage.
It won’t pay for a rental while your car is in for routine maintenance or a mechanical breakdown, and it’s different from the coverage you rely on when you rent a car on a trip. If another driver caused the accident, that driver’s insurer may pay for your rental, but your own coverage can get you into a car without waiting for a decision on fault.
Key Takeaways
- Rental reimbursement pays for a rental while your car is repaired after a covered collision or comprehensive claim, up to a daily limit and a per-claim limit.
- It generally doesn’t cover breakdowns, routine maintenance or vacation rentals, and you’ll usually pay for fuel, extra mileage and anything you add at the rental counter.
- If someone else caused the crash, their insurer should pay for a rental for a reasonable repair period once it accepts liability. Your own coverage doesn’t have to wait for that.
- If your car is totaled, rental payments usually stop within days of the settlement offer, so start shopping for a replacement right away.
How Rental Reimbursement Works
The Texas Department of Insurance sums it up: rental reimbursement “pays for you to rent a car if yours is stolen or being repaired after an accident. Some policies also pay for taxis or ride-hailing services.” It isn’t automatic. The Insurance Information Institute notes that many drivers are surprised to learn their policy doesn’t cover a rental because they skipped this option.
Most versions have two limits. State Farm describes them as a per-day limit, the most the insurer pays for each day you need transportation, and a per-loss limit, the most it pays in total for one covered accident. If the rental costs more than your daily limit, you pay the difference.
Here’s an example. Say your policy pays $40 a day up to $1,200, and a covered collision puts your car in the shop for 20 days. If the rental costs $55 a day, the coverage pays $40 a day, or $800 in total, and you pay the remaining $15 a day, or $300. If the repairs had taken 35 days, the coverage would have stopped at $1,200.
A few other details are common across insurers:
- There’s usually no separate deductible. Progressive and Allstate both say rental reimbursement typically doesn’t have one. The deductible on the underlying collision or comprehensive claim still applies to your repairs.
- Extras aren’t included. Insurers generally don’t reimburse fuel, extra mileage charges, security deposits or insurance you buy at the rental counter.
- Billing depends on the rental company. Allstate explains that a rental company with an agreement with your insurer may bill the insurer directly. Otherwise, you’ll likely pay up front and ask to be reimbursed.
- Payments stop when repairs are done or when you reach your limit, whichever comes first. Some policies also cap the number of days.
What Major Insurers Offer
The dollar amounts below are the examples insurers use on their own websites. You choose your limits when you add the coverage, and the options vary by state.
| Insurer | Coverage name | Example limits | What it pays for |
|---|---|---|---|
| Progressive | Rental car reimbursement | Typically $40 to $70 a day, for up to 30 or 45 days depending on the state | A rental car. Progressive says you typically need comprehensive and collision to add it. |
| State Farm | Car Rental and Travel Expenses | $30 a day and $900 per loss (State Farm’s example) | A rental car, rideshares or bus fares, plus up to $500 for meals, lodging and transportation if the damage happens more than 50 miles from home |
| GEICO | Rental Reimbursement | $25 a day and $750 per claim (GEICO’s example) | A rental car. GEICO says you’re covered regardless of fault, within your limits. |
| Allstate | Rental reimbursement | Up to $30 a day for a maximum of 30 days (Allstate’s example) | A rental car or public transportation fare |
| Nationwide | Rental car reimbursement | 30/600, meaning $30 a day and $600 in total (Nationwide’s example) | A rental car after a covered collision or comprehensive claim |
| Liberty Mutual | Rental Car Reimbursement (Transportation Expenses endorsement) | The daily limit you choose | If Liberty Mutual arranges the rental and you use one of its direct repair shops, it pays up to your daily limit for as long as repairs take |
| Farmers | Rental Car Reimbursement and Loss of Use | Rentals for up to 30 days. Loss of Use pays a flat amount. | Loss of Use can go toward public transit, rentals, taxis and rideshares, and it also applies after a total loss |
When Rental Reimbursement Doesn’t Apply
- Mechanical breakdowns. Progressive says, “A mechanical breakdown doesn’t qualify as a covered claim,” so you’d pay for a rental yourself unless you have mechanical breakdown coverage. RateFrog covers this situation for GEICO customers in whether GEICO covers a rental car when your car breaks down.
- Routine maintenance and vacation rentals. Allstate says the coverage “does not apply if your vehicle needs routine maintenance work or if you need to rent a car on vacation.”
- Damage your policy doesn’t cover. State Farm says the coverage applies “only if there is a covered loss” under your comprehensive or collision coverage. So if you carry only liability coverage, you generally won’t get a rental for repairs to your own car. Georgia’s insurance rules spell out the same limit.
- Costs above your limits, plus fuel, mileage, deposits and rental counter add-ons.
What If the Other Driver Was at Fault?
Then the other driver’s insurance should pay for your rental, even if you don’t have rental reimbursement. The NAIC says, “When the claim is against the other driver’s company, the other driver’s company should pay your rental car cost for a reasonable length of repair time.” The Texas Department of Insurance says the same, adding that you can keep the rental for the time the company believes is reasonable for the repairs.
The catch is timing. The at-fault driver’s insurer has to accept liability first. The Utah Insurance Department puts it bluntly: “The insurer is obligated to pay for loss of use only if they accept liability.” Some states set extra rules. Utah’s regulations require the at-fault insurer to pay reasonably incurred rental or transportation costs while your car is repaired, and Rhode Island law requires a rental that’s “reasonably comparable” to your damaged car.
This is where your own coverage earns its keep. As the Insurance Information Institute points out, the other insurer may take time to agree to pay, but “With your own replacement rental coverage, there’s no waiting.” If the other company denies fault, the Texas Department of Insurance suggests filing with your own insurer, and if your insurer later recovers the money from the at-fault driver’s company, you might get your deductible back.
In Texas, your own insurer will also pay for a rental if you have uninsured/underinsured motorist coverage and the driver who caused the crash had no insurance or not enough, or if it was a hit-and-run. Other states handle this differently, so check your policy.
Rental Reimbursement After a Total Loss
Once your car is declared a total loss, the rental clock speeds up. The Texas Department of Insurance warns that if the company totals your car, “it might stop paying for the rental a few days after telling you.” For claims against the other driver’s insurer, the NAIC says your right to a rental “ends once a settlement has been offered,” though it notes that many companies pay for a rental after a total loss as a courtesy.
Policy wording shows how short the window can be. A Progressive policy filed in Nevada ends rental payments 72 hours after the settlement offer on a total loss. A State Farm policy used in California ends them five days after the offer, and a State Farm endorsement filed in Nevada allows seven days. Rhode Island goes the other way for claims against an at-fault driver: once that insurer accepts liability for a total loss, it has to keep paying for a rental for at least seven days after you receive the settlement check.
GEICO gives the practical advice: when your car is a total loss, “the amount of authorized rental time will be limited, so you should begin shopping for a replacement as soon as you learn your vehicle is a total loss.” RateFrog’s guide to how GEICO decides a car is totaled explains that side of the process.
Rental Reimbursement vs. Insurance for a Car You Rent
These are two different things. Rental reimbursement pays for a rental while your own car is being fixed. When you rent a car for a trip, the question is whether your policy covers you in the rental. The Insurance Information Institute says the insurance and deductibles you have on your own car generally apply when you rent a car for personal use. But the California Department of Insurance cautions that “Not every auto insurance policy automatically provides coverage for rental vehicles,” so check yours before you travel.
At the rental counter, the collision or loss damage waiver isn’t insurance, but it releases you from paying for damage to the rental. The NAIC says that if you carry comprehensive and collision on your own car, “you will likely not need this additional protection,” which it says can cost $10 to $20 a day. Credit card rental benefits are usually secondary to your own insurance. For company-specific details, see RateFrog’s guides to GEICO rental car coverage and Allstate rental car coverage.
Is Rental Reimbursement Worth It?
No insurer we checked publishes a price for it. The Insurance Information Institute describes it as available “for a nominal extra amount” with almost every policy, and Nationwide suggests choosing a lower daily limit if you want a lower premium.
It tends to be worth adding if you depend on your car every day and don’t have another vehicle in your household to fall back on. Repairs can also take longer than expected when a shop has to wait for parts, and a week or two of rental charges can add up quickly. It’s less important if your household has a spare car, you can get by with transit or rideshares for a while, or you don’t carry collision and comprehensive coverage in the first place.
If you add it, pick a daily limit close to what a rental actually costs where you live. A low limit keeps the premium down, but you’ll pay the difference every day the car is in the shop.
Frequently Asked Questions
Does Rental Reimbursement Have a Deductible?
Usually not. Progressive and Allstate both say rental reimbursement typically doesn’t have its own deductible. The collision or comprehensive deductible still applies to the repairs on your car.
Can I Use Rental Reimbursement for Uber, Lyft or the Bus?
Sometimes. State Farm says its coverage may help pay for rideshares or bus fares, Allstate includes public transportation fares, and Farmers’ Loss of Use option can be used for transit, taxis and rideshares. Other insurers’ websites mention only rental cars, so check your policy.
Does Rental Reimbursement Pay If My Car Is Stolen?
It can. The Texas Department of Insurance describes rental reimbursement as paying for a rental if your car “is stolen or being repaired after an accident.” Theft falls under comprehensive coverage, so you’d generally need comprehensive on the car too.
How Long Will Rental Reimbursement Pay?
Until your car is repaired or you reach your limits, whichever comes first. Some policies also cap the number of days. Progressive says its coverage typically lasts up to 30 or 45 days depending on the state, and Farmers covers rentals for up to 30 days.
Sources
- Texas Department of Insurance: Auto Insurance Guide
- Texas Department of Insurance: Dealing With the Other Driver’s Insurance
- NAIC: Auto Insurance
- California Department of Insurance: Automobile Insurance Guide
- California Department of Insurance: Consumer Alert on Coverage for Rentals
- Utah Insurance Department: Third-Party Auto Claims
- Rhode Island General Laws section 27-7-6
- Georgia Rules and Regulations, Chapter 120-2-52
- Insurance Information Institute: Will My Insurance Cover Renting a Car After an Accident?
- Insurance Information Institute: Rental Car Insurance
- Progressive: Rental Car Reimbursement Coverage
- Progressive: Nevada Auto Policy 9611D (PDF)
- State Farm: Car Rental and Travel Expenses Coverage
- State Farm: What Is Rental Reimbursement Coverage?
- State Farm: California Car Policy Booklet (PDF)
- State Farm: Nevada Amendatory Endorsement 6128DR (PDF)
- GEICO: Vehicle Rental
- Allstate: Rental Reimbursement Coverage
- Nationwide: Rental Car Expense Coverage
- Liberty Mutual: Rental Car Coverage
- Farmers: Coverage Options