Rent-A-Wreck: When Does Insurance Cover Your Rental Car?

Having your car in the shop is an inconvenience, but maybe insurance can help with the cost

Oh, no! You’ve been in a car accident and your brain is reeling with all the things you need to do next: file an insurance claim, go to the doctor, and… wait! How are you going to get there if your car is wrecked?

First things first, though. It’s important to go to a doctor after a car accident, even if you don’t think you’re injured. That’s because there are some injuries that could take days or weeks to show symptoms and it could be difficult to prove that the accident caused the injury if you wait too long to get a medical exam.

Next, you should report the accident to your insurance company. Even if you are not liable for the accident, or if you don’t plan to make an insurance claim, you should still make a report. A report is not the same as a claim; if you don’t report quickly after an accident, your insurance company could deny a claim if you change your mind and need to file one later.

The next (important) consideration is… how will you get around without a car? This can be a major source of stress, particularly if you rely on your car to get to work, the supermarket, or anywhere else you need to go. And most people don’t just have an extra vehicle at their disposal, so being without a car until it’s repaired or replaced is a hardship.

Your next call after the insurance report could be to a rental car agency to learn your options and costs for a “rent-a-wreck” while you’re waiting for your car to be available.

But a rental car is costly, particularly if it’s a cost you didn’t plan for. So, you likely want to know whether this is a cost that your insurance will cover.

Factors that affect whether insurance will cover the cost of your rental car

Rent-a-wreck and other rental car companies often have a car ready immediately available. You might have to be flexible on the type of car, depending on inventory, but you should be able to locate one in most circumstances.

But who pays?

Rental reimbursement is an optional, add-on coverage for most car insurance policies and it might cost more in premium. Your rental reimbursement might also cover costs for other types of transportation, including rideshares like Uber or Lyft, public transportation, or taxis.

Even if you have rental reimbursement as part of your policy, there’s likely a limit to how much it covers per day. Most insurance companies reimburse $30 a day for rental for up to 30 days.

It is reasonable to expect that the insurance company would cover the cost of a car that’s similar to the one that was in the accident and with a similar value. For example, if the car that requires repair is a minivan, it is not reasonable for the insurance to only cover the cost of a small two-door sedan that doesn’t meet your needs. After all, if you’re driving a minivan, maybe you have four children in car seats—a small two-door won’t accommodate your transportation needs.

However, you can’t expect just to submit your receipt and be reimbursed. Before you rent a car, either read the fine print on your policy or call your insurance adjuster to find out exactly what is—and isn’t—covered.

Some insurance companies have preferred rental car companies and can deny the reimbursement claim if you rent from another company.

The insurance company might also weigh whether you were at fault for the accident as a factor in determining whether to cover your rental car costs.

Claims against the other driver’s insurance for rental car costs

If you’re in an at-fault state, the person responsible for causing the accident is liable for paying the costs. This can be through their insurance company or out of pocket (and if neither is covering as it should, you might need to file a car accident lawsuit).

If the other driver was at fault for your accident, there are three ways you can recover costs:

1. File a claim against their insurance policy directly.
2. File a claim with your own insurance, and they will make a claim against the other insurance company (this is called a subrogation claim).
3. File a personal injury lawsuit.

However, if the other party doesn’t have a rental car rider (add-on) on their insurance policy, it might not cover your rental car, even if your policy does.

Is it worth it to buy rental reimbursement insurance?

Like all insurance questions, this depends on your specific circumstances. Would you rather pay a few extra dollars per month for an add-on to your policy that would cover a rental, or would you prefer to take your chances and pay out-of-pocket for a rental if you’re in an accident? If the add-on costs $6 per month, that’s $72 per year. But a rental car might cost $80 per day, and you could need one for a week or more.

Perhaps you have access to another car in your household, and it wouldn’t be a big problem to get transportation if you’re without a car for a few weeks.

Only you can make that decision.

What if your claim for rental car reimbursement is denied?

If you were not at fault for the accident and you have rental car reimbursement insurance, you should contact the insurance adjuster and see what you need to do to get coverage (like going through Rent-A-Wreck or whatever company they prefer).

If you believe you’re entitled to coverage and aren’t receiving it, you can contact a personal injury lawyer for help. Whether it’s a question of correctly interpreting a contract (because an insurance policy is a contract) or even the possibility of insurance bad faith, your attorney can help.