Does Full Coverage Include Rental Car?

What "Full Coverage" Actually Includes

"Full coverage" typically means three core coverages:

1. Liability coverage (required by law) • Bodily injury liability: Pays others' medical bills when you're at fault • Property damage liability: Pays for others' vehicles/property you damage • Does NOT cover your rental car needs

2. Collision coverage • Pays to repair or replace your car after accidents • Does NOT provide a rental car while yours is being fixed

3. Comprehensive coverage • Pays for theft, weather, vandalism, fire, animal strikes • Does NOT provide a rental car while yours is being repaired/replaced

What's missing: • Rental car reimbursement • Roadside assistance • Gap insurance • Loan/lease payoff coverage

These are optional add-ons you must specifically select and pay extra for. They don't come standard with "full coverage."

What Is Rental Reimbursement Coverage?

Rental reimbursement (also called rental car coverage or transportation expense coverage) pays for a rental car when your vehicle is unusable due to a covered claim.

How it works: • Your car is damaged in a covered incident (accident, theft, weather, etc.) • You file a claim and your car needs repairs or replacement • Your insurance pays for a rental car while your car is in the shop • Coverage has daily and total limits (e.g., $30/day, $900 total)

Typical coverage limits: • $30-$50 per day (most common: $30-40/day) • Up to 30 days total (sometimes 45 days for total loss situations) • Maximum total: Daily limit × number of days (e.g., $30/day × 30 days = $900 max)

What triggers coverage: • Collision claim: Your car is damaged in an accident and being repaired • Comprehensive claim: Your car is damaged by weather, theft, vandalism, etc. • Total loss: Your car is declared totaled and you're shopping for a replacement

What does NOT trigger coverage: • Routine maintenance: Oil change, tire rotation, scheduled service • Mechanical breakdown: Engine failure, transmission problems (unless you have mechanical breakdown coverage) • Voluntary repairs: Upgrades, modifications, elective work • Recalls: Manufacturer recall repairs

Cost: • Typical annual premium: $15-$40 per year • Increases with higher limits: $50/day coverage costs more than $30/day • One of the cheapest optional coverages available

When Rental Coverage Kicks In (and When It Doesn't)

Rental reimbursement covers you when:

Scenario 1: Collision accident • You're in an accident (at fault or not at fault) • Your car needs repairs taking 5-10 days • Rental coverage pays $30-50/day during repairs • You file one claim for both car damage and rental reimbursement

Scenario 2: Comprehensive claim • Hailstorm damages your car • Repairs take 2 weeks • Rental coverage provides a vehicle during that time

Scenario 3: Theft • Your car is stolen • Rental coverage provides transportation while police investigate • If car is recovered and needs repairs, coverage continues • If car is totaled, coverage continues until settlement (up to policy limits)

Scenario 4: Total loss • Your car is totaled in an accident or by weather • Rental coverage pays for 30 days while you shop for a replacement • Gives you time to receive insurance settlement and find a new car

Rental reimbursement does NOT cover you when:

Scenario 1: Not-at-fault accident + other driver has insurance • If the other driver is at fault and has insurance, THEIR liability insurance should pay for your rental • Your rental reimbursement is backup if their coverage is inadequate or delayed • You typically won't need to use your own rental coverage

Scenario 2: Routine maintenance • Your car is in the shop for oil change, tire rotation, brake service • Not a covered claim—just normal maintenance • Rental reimbursement doesn't apply

Scenario 3: Mechanical breakdown • Engine failure, transmission problems, electrical issues • Standard rental reimbursement doesn't cover mechanical failures • You'd need separate mechanical breakdown insurance (MBI)

Scenario 4: Voluntary upgrades or modifications • Installing new stereo, upgrading suspension, custom paint • Not a claim—elective work • Rental reimbursement doesn't apply

Scenario 5: You exceed policy limits • Your policy covers $30/day but rental car costs $55/day • You pay the $25/day difference out of pocket • Or your repairs take 45 days but your policy maxes out at 30 days • You pay for days 31-45 yourself

Do You Need Rental Reimbursement Coverage?

You should ADD rental reimbursement if:

1. You don't have a backup vehicle • Single-car household or both cars are essential • No easy access to rides from family/friends • Public transportation is inadequate for your needs • Being without a car would disrupt your life significantly

2. You rely on your car for work • Daily commute is necessary • Job requires transportation (sales, deliveries, home healthcare) • Missing work would cost more than the rental coverage premium • $20-30/year is cheap insurance against lost wages

3. You can't easily afford a rental car out of pocket • $40-60/day for 7-14 days = $280-$840 • This expense would strain your budget • Spending $20-30/year to avoid $300-800+ surprise expense makes sense

4. Your car is financed or leased • You can't just "go without" a car—you're paying for it monthly • Gap between repair time and return to use hurts financially • Protects your ability to get to work to make car payments

5. You have kids or caregiving responsibilities • School drop-offs, daycare, medical appointments • Can't easily manage without reliable transportation • Family logistics require a functioning vehicle

You can SKIP rental reimbursement if:

1. You have a backup vehicle • Second car in the household • Can easily borrow a car from family/friends • You have reliable alternatives

2. You work from home • No daily commute • Flexible schedule for errands and appointments • Being without a car for a week wouldn't disrupt your income

3. You have excellent public transportation • Live in a city with robust transit • Can Uber/Lyft affordably for 1-2 weeks • Alternatives cost less than rental reimbursement + rental car anyway

4. You have cash reserves • $500-1,000 emergency fund available • Can easily afford a rental car if needed • Prefer to self-insure this risk

5. Your car is very old/low value • Repairs are unlikely to be approved (car might be totaled instead) • You might opt not to repair the car at all • Low likelihood of needing a rental during repairs

Rental Coverage Limits: How Much Do You Need?

Common rental reimbursement limit options:

$30 per day / $900 total (30 days) • Cost: $15-25/year • Covers: Economy/compact rental cars • Good for: Most people who just need basic transportation • Limitation: May not cover larger vehicles (SUVs, minivans)

$40 per day / $1,200 total (30 days) • Cost: $20-30/year • Covers: Mid-size sedans, possibly compact SUVs • Good for: Families needing more space • Sweet spot: Best value for most drivers

$50 per day / $1,500 total (30 days) • Cost: $30-40/year • Covers: Full-size vehicles, SUVs, minivans • Good for: Larger families, those who drive larger vehicles • Premium option: Closest match to your actual vehicle

How to choose:

Step 1: Check rental car rates in your area • Economy car: typically $35-50/day • Mid-size car: typically $45-65/day • SUV/minivan: typically $60-90/day

Step 2: Match coverage to realistic needs • If you drive a sedan, $30-40/day is usually sufficient • If you drive an SUV/minivan and need that space, choose $50/day • If you just need to get to work, economy rental is fine → $30/day

Step 3: Consider the cost difference • $30/day coverage: ~$20/year • $50/day coverage: ~$35/year • Difference: $15/year for 67% more daily coverage • Usually worth upgrading to $40-50/day

Pro tip: Choose coverage that matches or slightly exceeds average rental rates in your area. You don't want to be stuck paying $20/day out of pocket because you chose $30/day coverage in a market where rentals cost $50/day.

Alternatives to Rental Reimbursement Coverage

If you don't have rental reimbursement, you have other options:

1. Claim against the at-fault driver's insurance • If you're not at fault: Other driver's liability insurance should pay for your rental • Process: File a third-party claim with their insurer • Limitation: Only works if other driver has insurance and accepts fault • Delay: Can take days to set up, requires proving fault

2. Use credit card rental coverage • Some credit cards: Provide rental car reimbursement benefits • Check your card: Premium cards (Visa Signature, World Mastercard) often include this • Limitation: Usually secondary coverage, requires you to pay upfront and get reimbursed

3. Rely on rideshare/public transit • Uber/Lyft: $10-30 per trip adds up quickly • Public transportation: Bus, subway, light rail if available • Cost comparison: 2 Uber rides/day × 10 days = $200-600 (often more than rental)

4. Borrow a car from family/friends • Free transportation if available • Insurance consideration: Your insurance or theirs may cover you as a permissive user • Limitation: Inconvenient, not always available

5. Pay out of pocket for a rental • Cost: $40-60/day × 7-14 days = $280-840 • Makes sense if: You rarely have claims and prefer to self-insure • Risk: Unexpected $500+ expense

The math: • Rental reimbursement premium: $20-30/year • Average claim frequency: Once every 5-10 years • Cost over 10 years: $200-300 in premiums • Benefit if you claim once: $300-900 in rental costs covered • ROI: Usually positive if you file even one claim in 10 years

How to Add Rental Reimbursement to Your Policy

Adding rental coverage is simple:

Step 1: Contact your insurance company or agent • Call, use online portal, or mobile app • Ask to add "rental reimbursement" or "transportation expense coverage"

Step 2: Choose your coverage limit • Select daily limit ($30, $40, or $50 per day typical) • Confirm total duration (usually 30 days)

Step 3: Review the premium increase • Typically adds $15-40 per year ($1.25-3.50 per month) • One of the cheapest optional coverages

Step 4: Confirm effective date • Usually takes effect immediately or on your next policy renewal • You cannot add it retroactively after an accident

Step 5: Update your policy documents • Review updated declarations page • Confirm rental coverage limits are correctly listed

Important: You must add rental reimbursement BEFORE an accident or claim occurs. You cannot add it after the fact.

Frequently Asked Questions