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Need a rental after making a claim?

Question: How are transportation expenses provided under comprehensive coverage different from rental reimbursement coverage?

Answer:  Transportation expenses that are provided under comprehensive coverage, with some car insurance companies' policies, can be quite similar to rental reimbursement coverage you can buy as an additional coverage on your car insurance policy. 

The main difference is that transportation expenses under comprehensive covers you only under that portion of your policy while rental reimbursement covers your vehicle if it's disabled due to an auto accident or incident that is covered under collision or comprehensive.

Transportation expenses

Each car insurance company is different with what it offers as part of the main coverages you purchase, such as your physical damage coverages of comprehensive and collision, and as additional coverages you can add onto your policy.

The basics of what you’re referring to as transportation expenses under comprehensive coverage is what some auto insurers automatically include as part of your basic comprehensive coverage so that the costs of a rental car are covered (up to your policy limits) if your vehicle is stolen. 

With some car insurance companies' policies, the transportation expense under comprehensive coverage will extend and cover rental car expenses if your car is disabled due to other perils covered under your comprehensive coverage, such as running into a deer.

Transportation expenses like this may be included in the cost of your comprehensive premium or you may be required to pay extra to have this coverage bundled with your comprehensive coverage.

Insurance companies that offer transportation costs in this way, may also offer transportation expenses for you to purchase for your collision coverage.  So you'd buy the coverage for each separately.

For example, Erie Insurance offers basic transportation coverage in car insurance policies that include comprehensive coverage without charging you an extra fee.  If you want higher than the basic limits stated in our policy, which is typically $20 per day with a limit ranging from $450 to $900 depending upon what state you live in according to the Erie Insurance website, then you can obtain higher limits for an additional charge.

Erie Insurance also offers transportation expenses if your car is disabled due to a collision loss, but for this coverage you must pay an additional premium on top of your collision costs.

Transportation expenses will be defined by the terms of your specific policy. It may strictly pay for a rental car or could include payment for other transportation expenses, such as cab or bus fares.

Rental reimbursement

While some insurers offer transportation expenses, it’s more common for car insurance companies to offer rental reimbursement coverage as an optional coverage for drivers who already have comprehensive and collision coverage on their policy.

In general, rental reimbursement coverage pays for a rental car if your vehicle is damaged by a covered loss. This coverage is normally purchased with a daily and total maximum.

For example, $20 per day up to a total of $600 is pretty common for basic rental reimbursement limits.  However, if you want more coverage, some insurers will allow you to buy much higher limits – such as of up to $50 per day for up to 30 days, or a maximum of $1,500.  Of course, the higher the limits the more you’ll pay for the coverage.

Read your policy’s fine print

If you don’t have a spare car to use if your vehicle is inoperable, then either transportation expenses or rental reimbursement can be a smart addition to your car insurance policy -- just make sure you know when the coverage will cover you and its limits.

For instance, as I mentioned, some transportation expenses only covers comprehensive or collision.  If you want the coverage under both portions of your policy, make sure your insurer adds it to both and charges you appropriately.

And remember the terms of the policy matter -- a lot. 

Rental reimbursement terms of the coverage typically state that it pays for your rental car costs while your car is being repaired as a result of a covered claim or covered loss. This keeps you from being able to use this coverage if your vehicle is inoperable due to a mechanical problem or other issue that you can’t claim.

It’s also good to ask if your rental reimbursement coverage would be available to you if you placed a claim against another driver’s physical damage liability coverage, but the other party’s insurer wouldn’t (or couldn’t due to limits being reached) pay for the costs of a rental car while your car was unable to be driven.

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