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Does collision car insurance cover a rental car?


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Question: Does collision insurance cover the cost of a rental car while your car is being repaired? And does your car insurance policy, including collision coverage, cover you when you are driving a rental car?  If so, does your policy cover any driver listed on your policy if they rent a car?

Answer: Collision coverage will pay for damages to your vehicle, minus your deductible amount, but it doesn't pay for you to have a rental vehicle while your vehicle is being repaired.

If you need to rent a car after your vehicle has been in an accident, you need to have rental reimbursement coverage as part of your car insurance policy.

Rental reimbursement coverage is extra (optional) coverage you must add to your auto insurance policy in order to have your car insurance provider pay for a rental car.  This coverage allows you to rent a vehicle after you’ve been in a covered accident and either your car is not able to be driven or is in the shop being repaired.

Rental reimbursement coverage can be used only if your vehicle is not available due to a covered loss. If you need to rent a car for another reason, such as a mechanical issue that is not covered by your car insurance policy, then you wouldn’t be able to use this coverage.

When you do use your rental reimbursement coverage, there is usually a daily limit and total maximum limit that it will pay out for your rental car. Your policy will list your limits, such as $25 a day up to a total of $450 in total, a common amount given for this coverage.  

When either using your rental car reimbursement coverage or paying for a rental car on your own, your car insurance coverages should extend to the rental car.   If someone listed on your policy is renting a car, your policy’s coverages should extend to that individual, as well.

Most car insurance policies’ coverages, including both liability and collision, do cover a rental car because it’s considered a replacement vehicle for your insured vehicle that is in the shop being repaired.

Even if you are on vacation and rent a car, your car insurance policy will still normally follows you to the rental. Keep in mind that most policies provide this coverage, but not all.

We recommend that you check with your car insurance company to find out what exactly your car insurance policy covers with regards to rental cars.

If rental cars are covered, find out all the details, since some policies cover only rentals used for personal reasons and not for business. This means if you rent a car while on a business trip, your personal auto insurance may not extend to the rental vehicle.

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