Explaining Rental Car Insurance And Rental Reimbursement Coverage

Whenever buying car insurance, most agents and brokers like to encourage clients to buy additional protections that many might need but many more could do without. Right at the top of that list is a rental car rider, which extends coverage to vehicles that are rented for a short time.

For some people, such additional plans can be worthwhile, particularly if they travel a great deal and make use of such vehicles several times. And the cost of such plans generally is low, maybe amounting to between $10 and $30 each six months. But for many others, there is no need of additional cost of any sort due to the fact many credit cards give free protection when using them to pay when renting a vehicle.

As always, there are limitations to such coverages, whether using a credit card or when having it as part of an auto policy. Many credit cards have a time limit for when legitimate claims may be filed, such as within 45 days of the damage-causing incident. And the coverage might not be transported to another nation, such as Mexico or when traveling overseas. But the cost of buying coverage when actually renting a vehicle can be very high, and most companies will not let a vehicle off their lot without the protection of a policy in place.

A recent survey done by the National Association of Insurance Commissioners indicates about 42 percent of those polled at best had only a “rough idea” of whether or not their already in force auto insurance plans would carry over when renting. And 34 percent went ahead and paid for additional protection when at the counter before driving off in a rented vehicle because they did not know if they had coverage or not and wanted to ensure they were covered. In many cases, either the right charge card or their auto policies would have negated the need for that additional cost.

While the additional cost of such plans often is confusing to people, the concept of rental reimbursement coverage generally is better understood by people. Generally, when traveling and a vehicle is damaged and needs repairs or even if involved in an accident while driving locally, the price of obtaining temporary transportation will be paid up to certain limits with a rental reimbursement plan.

Such plans can help make it possible to continue traveling or driving to and from work and running other daily chores instead of having to use public transportation or just bumming rides from others while awaiting repairs. Such policies generally will pay a limited amount per day and have a maximum total amount provided by policy limits, such as $125 in total, for example.

But limitations include the policyholder might have to pay the costs up front and file a claim for at least partial reimbursement. And if owning or having access to another vehicle, carrying such policies generally are not necessary.


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