At Paradiso Insurance, we want to make sure you understand all of the coverage options available to you. When it comes to auto insurance, adding rental car reimbursement coverage to your policy, might just be in your best interest. Here’s why:
What is rental car reimbursement?
Rental car reimbursement is coverage within your auto policy that helps you pay for transportation expenses such as a rental car or public transportation while your vehicle is getting repaired after an insurance claim.
When does it apply & when does it not?
Rental car reimbursement comes into play after an accident where your vehicle was damaged and needs to be repaired. While your vehicle is in the shop, rental car reimbursement would pay for your alternate transportation, or in other words, your rental vehicle. Rental car reimbursement does not cover you when your vehicle is in the shop for routine maintenance repairs or anything along those lines. There must be an insurance claim for rental reimbursement to come into effect.
Rental Reimbursement Coverage Limits
Typically, rental reimbursement coverage has daily limits as well as a maximum number of days that this coverage will last for. For instance, if your daily limit of coverage is $50, then you must select a rental vehicle that only costs $50 or less per day. Furthering this example, if the maximum number of days your coverage will allow for is 10, then you will not be reimbursed for any days past that ten-day mark. So if you have your rental for 12 days and it costs $50 a day but your maximum limit is 10, then you will only be reimbursed $500. The additional $100 will have to be paid out of pocket.
It’s important to understand your coverage limits so that you can avoid going over them and possibly having to pay out of pocket charges.
Is there a deductible associated with this coverage?
The simple answer is this: it all depends on who is deemed at fault. In an accident, if you are found not at fault, then you will not have to pay your insurance deductible. This means that you will not have to pay for your car to be repaired, or for your rental vehicle. However, if you are found at fault, then you will have to pay your insurance deductible as listed on your policy. If you aren’t sure what your insurance deductible is, we highly recommend that you reach out to your licensed insurance agent to find out.
An example from one of our employee’s:
Our Marketing Manager, Caroline, had an unfortunate experience with rental car reimbursement and has allowed us to use her story to help educate you on why you may need this additional coverage.
When Caroline was rear-ended two years ago, she was found not at fault for the accident. Relieved that no one was hurt and that she had great coverage, she wasn’t concerned about the claim. The claims adjuster looked at her vehicle, the claim was submitted and her vehicle was brought into the shop for repairs. Caroline was assured that she would not have to pay a penny out of pocket to get her vehicle repaired. She was thrilled. Until she asked about a rental vehicle. At that point, Caroline was informed that she did not have rental car reimbursement on her policy. Unfortunately, Caroline had to pay for her own rental because she didn’t have this coverage option on her policy.
Upon renewal, Caroline immediately added this coverage, which most times is only a few dollars extra for the year, and has maintained this coverage on her policy ever since. Though initially, she thought this was a non-essential coverage option and felt she could save money without it, she now knows that it can be far more expensive to not have this coverage option than to pay the $30 extra for the year and be covered.
At Paradiso Insurance, we want to educate our customers so they can make the decision on what’s right for them. We never want our customers to find themselves in a situation like Caroline did, and we hope that this example will help you make an educated decision on whether or not this additional coverage option is right for you.
Give us a call today at 860-684-5270 and speak with one of our licensed insurance agents who will help you understand all of your options.