How to Have Insurance Pay for a Rental Car

If you're in a serious auto accident, you may be footing the bill for several weeks of rental car payments. Whether your car is being repaired or you're searching for a replacement after yours has been totaled, take measures to secure rental reimbursement coverage so your insurance company will pick up the rental car tab.

Difficulty: Moderately Easy

Instructions

1. Review your auto insurance policy to make sure you have a rental reimbursement clause. Though you may be on a quest to keep your rates down, rental reimbursement coverage is relatively inexpensive for the value, typically costing less than $5 a month.

2. Understand the policy details. Rental reimbursement insurance is typically designed to cover your rental car costs only if you are in an accident or your vehicle is stolen. It does not cover the cost of a rental car when your vehicle is in the shop for maintenance, bodywork, or mechanical repair unrelated to a collision.

3. Check into the logistics of your coverage. Some insurance companies make the driver pay for the rental car and apply for reimbursement afterward. Other insurance carriers pay the rental company directly. Remember, though, that you must pay to gas the vehicle up yourself. Insurance will not cover your fuel expenses.

4. Make sure your rental reimbursement policy is enough to cover a rental car that will accommodate your lifestyle. If you own your own business and need plenty of cargo space, you may need to rent an SUV or minivan. If you have six kids, you don't want to risk their safety by stuffing them into a compact car. The average rental reimbursement per day is $30, but depending on the area you live and the size of car you need, you may need to upgrade your policy to a higher daily reimbursement rate. If upgrading is not an option, be prepared to pay out of pocket for the extra rental costs.

5. Find out what your daily and per-accident rental limits are, and if they vary with the degree of the accident. Many insurance companies will pay $25 to $35 a day up to a maximum of $500 to $700, assuming your car is in the body shop. They may terminate the coverage, however, if the car is considered a total loss and you agree to a settlement.

6. Report your accident or stolen vehicle immediately, before you decide where to rent a car. Many insurance carriers contract with specific rental companies, and using their recommended rental provider will streamline the reimbursement process.

7. Call ahead to the rental car company to reserve an appropriate vehicle and discuss the payment process with them. Whether the insurance pays them directly or reimburses you, chances are the rental company will ask for a refundable credit card deposit. They will keep your number on file in case you damage the vehicle or return it without gasoline.

Tips & Warnings

• Comb through your auto lease or purchase agreement so you don't end up paying double for the same coverage. If you own a fairly new car (under 3 years old), your contract may have included a period of free towing and rental reimbursement. If that's the case, make sure you're not paying your insurance company for the same thing.
• Check out Dummies.com for a basic overview of auto insurance policies and how to read them (see Resources below).

Resources

• Dummies.com for auto insurance policy basics.