Insurance Talk
Car rental reimbursement
By Robin Jones I
f you found yourself car-less after a collision, what would you do? When Maggie Kent first got the news that her husband, Jack,
had been in a collision that totaled his Jeep, she didn’t even think about the car—just about her husband, who fortunately sustained only minor inju- ries. “I was just grateful that he was okay,” she says. But later that day, the challenges of
having only one car started to sink in. “Our jobs are in different directions, so we couldn’t really share a car,” Maggie says. “We figured we’d be buying a new car within a couple of weeks. But in the meantime, we knew we’d have to get a rental car for Jack.” Unfortunately, the Kents didn’t have rental reimbursement
coverage on their auto policy. Maggie had waived it about a month before the incident to save money. “I really wish I’d kept it,” she says. “It would have made things so much easier.” Indeed, rental reimbursement coverage can be a lifesaver if
you suddenly find yourself without a car after an accident. If you’re wondering whether you should add it to your policy, here are some things to consider.
Q: What does rental reimbursement cover? A: Generally, it covers the cost of a rental car, up to certain limits, while your insured car is being repaired following a covered loss (such as a crash, vandalism, or fire) or for a speci- fied amount of time set by your policy if your car is deemed not repairable.
Q: How does it work? A: Typically in one of two ways: You can get a car from a rental agency that’s been approved by your insurance company, in which case the agency will bill your insurance carrier directly. Or you can rent a car yourself and submit the receipts to your insurance company for reimbursement. Either way, the limits on the coverage are usually for a certain time period with per- day and per-accident limits— for example, $30 per day and
24 EnCompass September/October 2011
www.AAA.com
$900 per accident. That means you’ll pay for any costs over $30 a day, and you won’t be reimbursed for more than $900, even if the total costs are more.
Q: How much does it cost? A: The cost of rental reimbursement varies depending on your car and your insurance company, but the average cost per vehicle could be around $40 per year. Compare that to the average amount policyholders without cover- age would have to pay after a loss: $364—based on a rental car cost of $28 per day and about 13 days in the shop.
Q: Are there people who might not need the cov- erage? A: If you don’t need your car to handle daily activities—you work from home, for example, or you can walk or take public transit to all the places you need to go—you may not need rental reimbursement. Same goes if you have an extra car or know that you can borrow a car from a friend or relative. But if you don’t fall into one of those cat- egories, it’s probably a good idea to add rental reimbursement
to your policy. “Rental reimbursement provides a
cost effective and efficient method to maintain mobility for today’s active family” states Jim Rookard, Director of Insurance Services for AAA Colorado. Jim also notes, “Without rental car reimbursement coverage, a family may be faced with the financial consequences of having to pay out of pocket expense to rent a car while repairs are being made, in addition to paying the collision deductible for the actual car damage. This could easily total several hundred dollars of unbudgeted expense.” Contact your insurance agent for
more information or to answer any additional questions. l
Robin Jones is the former managing editor of Westways, the AAA member maga- zine for the Automobile Club of Southern California. She’s now a freelance writer in Long Beach. This article first appeared in the July/August 2011 edition of Westways.
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