Rental reimbursement
Rental reimbursement is optional auto coverage that helps pay for a rental car or other substitute transportation while your insured vehicle is out of use because of a covered loss. Your policy sets the daily and total limits, what transportation counts, the eligibility rules and when payment ends. Routine maintenance and ordinary travel fall outside it.
Also called: rental reimbursement coverage, loss of use (auto), rental car coverage
Rental reimbursement keeps you moving while your own car is being repaired after a loss your policy covers, such as a crash under collision coverage or a theft or storm under comprehensive coverage. It pays only up to the limits you chose, so the useful numbers are the daily amount, the per-loss maximum and the date payment stops. Anything above those limits is yours to pay.
How the daily and per-loss limits split a rental bill
Policies usually cap both the dollar amount per day and the number of covered days or total dollars, according to the NAIC auto insurance shopping tool (opens in a new tab). An example declarations page from State Farm's rental claims page (opens in a new tab) shows $25 per day and $600 per loss. Say your car is in the shop for 10 days after a covered collision and the rental costs $32 a day.
Hover or tap a row to highlight it.
| Item | Amount |
|---|---|
| Actual rental cost (10 x $32) | $320 |
| Most the daily limit allows (10 x $25) | $250 |
| Per-loss limit | $600 |
| Insurer pays | $250 |
| You pay ($320 minus $250) | $70 |
The $600 per-loss limit does not raise the $25 daily cap. A 20-day rental costing $700 would still be held to $500 by the daily limit, even though the per-loss limit is higher. Taxes, fuel, deposits, mileage and rental-company insurance may be treated differently under your policy. The $25 and $600 figures are one insurer's illustration, not a national standard.
Limit structures and what each changes
Rental reimbursement is not built the same way on every policy. Common structures include:
- Daily limit plus a per-loss limit, such as the $25 and $600 pairing above.
- Daily limit plus a maximum number of days, which caps the benefit by time instead of total dollars.
- A percentage-based daily limit; a declarations page may show either a dollar amount or a percentage, according to State Farm (opens in a new tab).
- Rental-car-only coverage, or broader transportation expense coverage that can include public transit or other substitute transportation. North Carolina describes extended transportation expenses as an optional endorsement that pays up to a specified rate and maximum total amount, according to the North Carolina Department of Insurance (opens in a new tab).
Timing varies too. Coverage may start when the car is unsafe or illegal to drive, or when repairs begin if it is still drivable. It may end when repairs are finished, the car is returned, a total-loss settlement is offered or the limit is used up. A higher daily or per-loss limit allows a larger payout and may cost more in premium; a lower limit restricts the payout.
Where you see rental reimbursement on your policy
The term mostly appears in personal auto insurance, and commercial auto policies may add it by endorsement. You'll see it on a quote as an optional coverage, on the declarations page with its daily and per-loss limits, and in the endorsement that sets covered losses, exclusions, waiting periods, payment method and when coverage ends. It can also show up on a binder, on a renewal notice if the limit changes, and in a claim letter explaining eligibility, payment limits or the end date.
New York calls the same benefit "Transportation Reimbursement" or "Extended Transportation" coverage, according to the New York Department of Financial Services (opens in a new tab). The search phrase "rental car coverage" can mean either this benefit or insurance for damage to a rented car, which are different coverages. If you're filing now, our guide on how to file a car insurance claim covers the steps around the rental.
Questions to ask an agent or insurer
- What is my daily limit, and what is my maximum per covered loss? Those two numbers decide how much of a rental bill stays with you.
- Which losses trigger the coverage? Collision, theft, vandalism, weather damage, a total loss and a car that is still drivable may be treated differently.
- When does payment begin and end? Policies may use a waiting period, the repair start date, the date the car became unsafe, the repair completion date, the settlement date or a stated maximum period.
- Can I use public transit, taxis or rideshare instead of a rental car? Some transportation-expense provisions are broader than rental-car-only coverage.
- Do I need approval before renting, and which charges are excluded? Preferred rental companies, direct billing, receipts, taxes, fuel, mileage, deposits, child seats, tolls, upgrades and rental-company insurance can all affect what you get back.
Frequently asked questions
These answers cover the situations people ask about most.
Does rental reimbursement pay for damage to the rental car?
Not necessarily. Rental reimbursement pays for substitute transportation, while damage to the rental vehicle is a separate question for your auto policy, the rental agreement, a collision-damage waiver or another insurance policy. In New York, many personal auto policies automatically include separate rental-vehicle coverage for damage to a rented car, according to the New York Department of Financial Services (opens in a new tab).
Is rental reimbursement included in every auto policy?
No. It is commonly optional, and not every auto policy provides rental-vehicle coverage automatically, according to the California Department of Insurance (opens in a new tab). Check your declarations page for the coverage and its limits before you need it.
Does it pay for a rental while my car is in for maintenance?
Generally no. The usual trigger is a covered collision or comprehensive loss, so routine maintenance or an uncovered mechanical breakdown leaves the rental cost with you.
Does rental reimbursement continue after my car is totaled?
Only for a limited time. Coverage may end when the insurer offers a total-loss settlement, the stated period runs out or the limit is reached, according to the California Department of Insurance (opens in a new tab). Ask the adjuster for the exact end date before you keep the rental.