Rental costs are covered only when rental reimbursement coverage is on your policy, and your car is being repaired after a covered claim. This optional add-on, sometimes called transportation expense coverage, runs $5 to $15 per month. Without it, your standard car insurance coverage won't cover a rental during repairs.
Does Car Insurance Cover Rental Car Costs?
Updated: June 4, 2026
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Key Takeaways: Rental Car Coverage
Rental reimbursement is an optional add-on to your car insurance policy that pays for a rental vehicle while your car is repaired after a covered claim. Standard policies don't include it automatically.
Most rental reimbursement policies cap daily payouts at $30 to $50 per day, but average rental car rates now run $60 to $100 per day, meaning you'll likely cover the difference out of pocket.
If you're renting a car for a vacation or personal trip, rental reimbursement doesn't apply. It only covers rentals while your own vehicle is being repaired after a claim.
When Car Insurance Covers Rental Car Costs
- Your car is in the shop after a collision claim (another driver hit you, you hit something or your car was damaged in a single-vehicle accident)
- Your vehicle is being repaired after comprehensive coverage paid out for damage from hail, a fallen tree, fire, theft recovery or flooding
- An at-fault driver's liability insurance is paying for your repairs and is also covering your rental costs through their policy
- You carry uninsured motorist property damage coverage and an uninsured driver damaged your car
- You're renting a car for a vacation, business trip or any reason unrelated to your car being in the shop
- Your car is in the shop for routine maintenance, mechanical repairs or recalls, which are not covered insurance claims
- You carry liability-only insurance and were at fault, so there's no collision or comprehensive to trigger a claim and no rental reimbursement starts
- Your claim falls below your deductible threshold, meaning you're paying out of pocket rather than using insurance
MONEYGEEK EXPERT TIP
“Rental reimbursement is one of the most overlooked, and most regretted, gaps in car insurance. Drivers often assume their policy covers a rental automatically, then get hit with a $400 rental bill after a fender-bender. Adding reimbursement coverage costs almost nothing and eliminates a major headache after an accident.”
- Mark Fitzpatrick, Licensed Insurance Agent
Understanding Rental Reimbursement Daily Limits vs. Real Rental Rates
Most insurers structure limits in tiers, typically $30, $40 or $50 per day with a total cap of $900 to $1,500. Rental rates have risen sharply. A standard economy car runs $60 to $100 per day in most U.S. markets, and SUVs or minivans run $90 to $150 per day.
If your policy pays $40 per day and the cheapest available rental is $75, you're paying $35 out of pocket for every day your car is in the shop. A 10-day repair adds up to $350 in out-of-pocket costs even with coverage in place. Pull your policy's declarations page and compare the daily limit to current rental rates in your area. Don't assume your limit is enough until you've checked.
Some insurers offer daily limits above $50 or allow policyholders to set their own cap. Ask your insurer what the maximum available daily limit is under your policy. If your insurer's maximum daily limit is still below current rental rates in your area, compare quotes from insurers that offer higher limits. Paying an extra $2 to $5 per month for a higher daily limit costs less annually than one day of out-of-pocket rental overage
Do You Pay a Deductible for Rental Car Coverage?
Rental reimbursement coverage carries no deductible of its own, so you pay nothing out of pocket for the reimbursed portion of your rental. The deductible on the underlying claim still applies. If your car needs $2,000 in collision repairs and you have a $500 deductible, you pay $500 toward repairs and your insurer covers the rest. Rental reimbursement pays separately for your temporary vehicle while repairs are underway.
How to Use Your Rental Car Reimbursement Coverage
Filing for rental reimbursement is different from a standard collision claim.
- 1Report the underlying claim first
Contact your insurer immediately after the accident or covered event. Rental reimbursement doesn't start until your claim is open. Report the claim via your insurer's app, website or 24/7 claims line.
- 2Confirm rental coverage with your claims adjuster
Once your claim is open, tell your adjuster you want to activate rental reimbursement. Confirm your daily limit and maximum benefit. For example: $40 per day up to $1,200 total.
Ask when coverage starts. Some insurers begin the day you file. Others wait until your car is at the repair shop.
- 3Use your insurer's preferred rental network if available
Many insurers partner with Enterprise or Hertz and can set up direct billing. That means you don't pay out of pocket and wait for reimbursement.
Ask your adjuster if this is available. If the preferred network has no vehicles available, rent elsewhere and keep receipts. Your insurer will reimburse up to your daily limit, regardless of which company you rent from
- 4Keep all rental receipts
If you're renting outside the insurer's network, save every receipt and submit them promptly. Your insurer reimburses up to your daily limit, and anything above that comes out of your pocket.
- 5Confirm coverage end date
Rental reimbursement stops when your car is repaired and returned, when your maximum benefit runs out, or when your insurer declares your vehicle a total loss.
After a total loss declaration, rental coverage typically continues for three to five days. That clock starts on the date of settlement, not the date you receive payment. If payment is delayed, your rental benefit may end before you have funds to replace the vehicle. Ask your adjuster for the exact date rental coverage ends and factor that into your replacement timeline
MONEYGEEK EXPERT TIP
If your repair involves a specialty shop or a backlogged body shop, rental costs can add up quickly. Before dropping off your car, ask the repair shop for a written repair timeline estimate. If the estimate exceeds your rental reimbursement maximum, ask your insurer whether they can negotiate a faster turnaround with the shop. Also ask whether they will authorize a benefit extension.
Will Using Rental Reimbursement Raise Your Rates?
Rental reimbursement coverage itself doesn't raise your rates. It's the underlying claim that affects your premium at renewal. If you file a collision or comprehensive claim and also use your rental reimbursement benefit, your insurer counts one claim, not two. Using rental reimbursement doesn't add a separate mark against your record.
Whether that underlying claim raises your rates depends on fault, your insurer's surcharge policies and your claims history. At-fault collision claims typically increase premiums by 20% to 40% at renewal. Comprehensive claims for weather, theft or vandalism typically don't raise rates at renewal. The exception is a pattern of claims. Multiple comprehensive claims in a short period may trigger a surcharge regardless of cause. If you’re unsure whether a claim will raise your rate, ask your insurer about its forgiveness policies before filing.
Rental Car Coverage: FAQ
Does rental reimbursement cover any rental car I choose?
Your insurer reimburses up to your daily limit regardless of the vehicle class you choose, but you pay the difference above that limit. If your policy pays $40 per day and you rent a $120 per day SUV, you cover $80 per day out of pocket. Some insurers restrict coverage to economy or standard vehicles. Check your policy's terms before booking a premium class.
Does car insurance cover rental cars when I'm traveling?
Yes, but through a different part of your coverage. When you rent a car for personal travel, your own liability, collision and comprehensive coverages typically extend to the rental vehicle in the U.S. and Canada. This means you usually don't need the rental company's collision damage waiver (CDW), which can run $15 to $30 per day.
Check your policy's declarations page under collision and comprehensive coverage. Look for a line that specifies rental car coverage or physical damage to non-owned vehicles. If there's none, your international rental is likely not covered.
What if the other driver is at fault? Do I still use my own rental coverage?
You have two options. You can file directly with the at-fault driver's liability insurer, who is responsible for your rental costs with no deductible and no daily limit cap beyond the reasonable cost of a comparable vehicle. Or you can use your own rental reimbursement and let your insurer subrogate (recover costs) from the at-fault driver's insurer. Using the at-fault driver's insurance is usually simpler if they accept liability quickly, but your own coverage may be faster if liability is disputed.
Is rental reimbursement included in full coverage car insurance?
No. Full coverage (liability plus collision and comprehensive) does not automatically include rental reimbursement. It's a separate optional add-on. Many drivers assume it's bundled in because they pay for full coverage, but insurers list rental reimbursement as a distinct line item on the policy. Check your declarations page under optional or additional coverages to see if it's there.
How long will rental reimbursement pay for my rental?
Rental coverage runs until your car is repaired and returned, your total benefit maximum is exhausted or your insurer settles a total loss claim. Most policies cap total benefits at $900 to $1,500. At $40 per day, that covers 22 to 37 days. Repairs that involve structural damage, airbag replacement or parts delays can run past those limits. Ask your adjuster for a repair timeline early so you know where you stand.
Does rental reimbursement cover a rental if my car is stolen?
Vehicle theft triggers comprehensive coverage. Rental reimbursement starts covering a temporary vehicle from the date the claim opens. If your insurer declares a total loss, rental reimbursement typically covers a few additional days after settlement, usually three to five, to give you time to arrange a replacement.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he has produced original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.
He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.
Like all MoneyGeek analysts, he draws on independent cost and consumer experience data, and no insurance company partnership influences his recommendations.
Fitzpatrick earned his degrees from Johns Hopkins University (M.A. Economics and International Relations) and Boston College (B.A.). He began his career in financial risk management at State Street. He's also a five-time “Jeopardy!” champion.