Grange Insurance recently listed 7 Things to Know about Rental Car Coverage. We thought the list was really good and wanted to share it with our clients. The items below apply to pretty much any auto insurance policy from any insurance company, but it’s always best to ask your agent about your specific situation.
Here’s the list:
1. It’s optional.
Rental reimbursement coverage does not automatically apply after an accident. As an optional coverage, it must be purchased separately. A common misconception is that auto insurance automatically covers the cost of a replacement rental car. In reality, you often have to select this coverage and apply it to the policy.
2. There is a limit.
You’ll likely have a per day and per occurrence limit. For example, if you have a 25/750 limit, your insurance company will pay up to $25 per day but no more than $750 per claim for the rental vehicle. Most insurance companies will offer several different options, allowing you to choose the limit that is right for you.
3. Your vehicle must be in the shop due to a covered loss.
Rental reimbursement coverage can be used while your vehicle is being repaired after an accident or another covered loss, not for routine maintenance or leisure. So, if your car is at the body shop after an accident, a rental car is covered up to your limit. But if your car is undergoing routine maintenance that will keep it in the shop overnight or you are renting a vehicle for a family road trip, then rental reimbursement coverage would not apply.
4. You can use it right away.
After reporting a claim, if your vehicle isn’t drivable, you can be authorized for a rental car right away. Otherwise, you will be relying on the at-fault driver’s insurance company, and you may have to wait a little while before they can assess the claim and agree to pay for a rental car. With rental reimbursement coverage, there’s no waiting.
5. No need to worry about additional insurance.
For the most part, when you have collision and comprehensive coverages in your auto insurance policy, it will transfer to the rental vehicle, eliminating the need to purchase additional coverage from the car rental agency.
6. You may not need it at all.
If you have access to another vehicle, rideshare service or public transportation in the event your vehicle isn’t drivable, you may not need rental reimbursement coverage. But if you prefer the safety net of having a rental available if you need it, you may want to opt-in to this coverage.
7. It costs less than you might expect.
One year of rental reimbursement coverage will typically cost less than one day of out-of-pocket rental car expenses.
Contact Us today if you have any concerns about your auto insurance program. We’d be happy to sit down with you and craft a policy that fits your unique situation the best.
Gem-Young is Western PA and the Mahoning Valley’s premier insurance and financial planning firm with offices located in Canfield and East Liverpool, Ohio. We are a locally owned, family-run business offering home and auto insurance, business insurance, life and health insurance, and a true wealth advisory asset management service. We believe in making a difference in our clients' lives. www.gemyoung.com