Rental Car Insurance: What is actually covered

Rental reimbursement coverage on insurance policies is often misunderstood. If you have rental coverage on your insurance policy it will not provide physical damage (Comp/Collision) coverage while you are driving the rental car. For example, if you get into an accident while on vacation, rental coverage will not pay for the damage caused to your rental car.

Rental reimbursement coverage is intended to reimburse you for the cost of renting a car while your car (the one insured on your policy) is being repaired. In this scenario, the rental car is considered a Temporary Substitute. If you have physical damage (Comp/Collision) coverage on your policy, it will apply to the rental car only if you are driving it as a Temporary Substitute.

Liability coverage typically transfers to the rental car no matter what the situation. This means that the cost of injury and damage you cause to another person and their vehicle, while driving the rental car, will usually be covered by your insurance policy. We recommended that you contact your insurance company’s underwriting department to verify coverage.

The best way to avoid paying extra rental car insurance at a rental car company (Hertz, Avis, etc.) is to use a credit card that provides this coverage. We have found that American Express provides the best coverage plan. Here is some more information on rental car damage coverage provided by your credit card.

Rental Reimbursement Coverage is very inexpensive to add to your policy and will save you money while your car is in the shop. To see how affordable rental coverage can be call your agent or get a Quote online today.

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