Why add Rental Reimbursement Coverage to your auto policy?
Just like many industries, supply chain issues are making it hard to find car parts.* So, you should expect longer wait times if your car is in the shop. Additionally, car rental prices have been increasing.** If being able to pay for a rental car for an extended period of time is a concern, you may want to consider rental reimbursement coverage.
What is Rental Reimbursement Coverage?
Rental reimbursement coverage, also known as extended transportation expenses coverage, is an optional coverage that helps cover the cost of a rental car if your insured car is in an accident and needs repair. This helps keep you driving even while your vehicle is in the shop getting fixed.
One of our carrier partners, Travelers, provides rental reimbursement coverage that ranges from $30 per day for up to a total amount of $900 to $100 per day for up to a total amount of $3,000. (Please note rental reimbursement coverage limits vary by state.) Rental Reimbursement should be a part of your basic auto insurance policy for complete coverage.
So much has changed in the past two years. Now is a great time to revisit your existing policy. As a review, I’ve outlined the basics of auto insurance below:
The basic components of auto insurance include: liability protection (for other drivers), uninsured/underinsured protection (for you and your passengers), medical protection (for you and your passengers), comprehensive protection, collision protection (what most people are thinking about when they think about insurance), tow and road service, rental reimbursement (as mentioned above) and glass coverage.
My recommendation is that every driver have at least the 100/300/100 limits of coverage, preferably the maximum 500/500/500 limits. If you don’t have these, please get with me to establish an insurance plan with these limits. It is not very expensive, you’ll be surprised. The other answer, umbrella insurance.
The other component of proper liability coverage is umbrella insurance. Like an umbrella, umbrella insurance is “over and above” what you already have for both homeowner and auto liability limits. It provides you with the assurance that you have enough protection to cover all the damages you may be responsible for. With umbrella insurance, you are protecting your assets from being used to settle a judgement against you.
*“A Tiny Part’s Big Ripple: Global Chip Shortage Hobbles the Auto Industry”, The New York Times, Oct. 14, 2021
**”Looking to Rent a Car? Expect Higher Prices, Long Waits and Slim Pickings”, The Wall Street Journal, December 24, 2021.