Car rental coverage on an automobile insurance policy—often called Rental Reimbursement or Transportation Expense Coverage—helps pay for a temporary replacement vehicle when your car is in the shop due to a covered claim.
Here’s how it works in simple terms:
What It Covers
Rental coverage pays for:
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A rental car
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Public transportation
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Ride-share or taxi expenses (with some insurers)
It only applies when your vehicle is being repaired because of a covered loss, such as:
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An accident covered by collision
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A non-accident loss covered by comprehensive (theft, hail, fire, vandalism, etc.)
What It Does NOT Cover
Rental coverage does not apply:
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For routine maintenance or mechanical breakdowns
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If you just want a rental for a trip
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If you didn’t purchase rental coverage on your policy
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If your car is drivable and not in the shop
How the Limits Work
Rental coverage is usually written as:
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A daily limit (example: $40, $50, or $75 per day)
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A maximum total limit (example: $900 total)
Example:
If your policy is $40 per day / $1,200 max:
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Insurance pays up to $40 per day
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Once you hit $1,200, coverage stops—even if repairs aren’t finished
If your rental costs more than the daily limit, you pay the difference.
When It Starts and Stops
Coverage typically begins:
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After your car is in the shop for repairs from a covered claim
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Sometimes after a short waiting period (varies by company)
Coverage ends when:
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Your car is repaired and ready for pickup
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Your car is declared a total loss (usually a few days after settlement offer)
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You hit your maximum dollar limit
Who Is At Fault?
Rental coverage on your own policy:
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Applies regardless of fault—as long as the loss is covered
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You don’t have to wait on the other driver’s insurance
If the other driver is at fault:
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Their insurance may also pay for your rental
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But it can take longer while liability is investigated
Key Takeaway
Rental reimbursement is inexpensive but valuable. If your car is in the shop after a covered accident or loss, it helps keep you on the road without paying full rental costs out of pocket. You should consider a daily limit that will provide for a rental in your area.
It does not replace your car—it just helps cover temporary transportation while yours is being repaired or settled.
Steve Pore is the agency principal @ Steve Pore Insurance Agency an Independent Insurance Agency in Wichita Kansas. Steve can be reached @ (316-) 773-9710.