Rental car reimbursement coverage covers renting a car as a substitute for your vehicle when it is disabled or is being repaired after a covered accident. Daily rental allowances, or limits, are subject to the terms of your car insurance policy.

Rental car reimbursement, or RREIM, only pays for your rental car costs if the repair work is being done because of a covered loss. If your car breaks down or has mechanical issues unrelated to a covered accident, rental car reimbursement coverage cannot be used.

Rental car reimbursement coverage typically only covers up to a specific daily limit. Information services company Experian says the typical policy covers about $30 to $40 per day for 30 days.

If you need to rent a bigger vehicle than the rental-car reimbursement allowance pays for or otherwise need to pay more for the daily rental cost, you will be responsible for the difference.

Check out our detailed guide: How to get the best rental car insurance

Is rental car reimbursement coverage mandatory?

No. Rental car reimbursement is optional coverage.

What happens if I don’t have rental car reimbursement coverage?

If you don’t carry this coverage, you may be without transportation or have to pay out-of-pocket for a rental if your car is damaged in an accident where you are at fault.

Also, if another driver is at fault but is uninsured, underinsured or their policy doesn’t cover a rental car, you may be without transportation or have to pay for a rental car while your vehicle is being repaired.

If you have an extra vehicle at your residence that you can use while one is being repaired due to a car accident, then rental car reimbursement coverage may be unnecessary.

Expert recommendations for peer-to-peer car rental: A guide to insurance coverage

– Michelle Megna contributed to this report.

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Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.