August 16, 2010

Rental Car Coverage Under An Auto Insurance Policy

When shopping for an auto insurance quote, you may purchase rental car coverage under your auto insurance policy. This coverage affords the ability to rent a car if your vehicle becomes involved in a collision or comprehensive loss. Your insurance company pays the rental charges, subject to certain reimbursement parameters.

Rental car coverage derives from a collision or comprehensive loss. A collision loss occurs when your vehicle collides with another vehicle or object. A comprehensive loss comes into play when your vehicle becomes damaged from an event other than an accident with another vehicle or object. Examples of comprehensive losses include fire, theft, earthquake, windstorm, hail and contact with a bird or animal. When your vehicle becomes damaged from any of these losses, you may obtain a rental car through a rental agency or garage, as long as rental car coverage was purchased under your auto insurance policy. When filing your collision or comprehensive claim, inquire from the insurance company representative about renting a vehicle.

Read your policy's terms concerning rental reimbursement in conjunction with how long you may rent a car, as each insurance company may word their terms differently. Generally, charges for rental reimbursement begin when your vehicle cannot be driven because of a loss, or if it is operable, when you drop off the vehicle at the repair shop. Conversely, charges for rental reimbursement end at the earliest of the following: when you pick up your car, when your car has been repaired, or when your car has been replaced with another car. If your car is declared a total loss, then rental car coverage will expire within a specific period of time prescribed by the policy terms after your insurance company makes an offer.

Subject to a coverage limit, reimbursement is limited to a maximum daily payment for your rental. The coverage limit and daily payment amounts are the rental car coverage purchased when you accepted your auto insurance quote. For reference, the declarations page of your auto insurance policy lists the coverage amounts. If the cost associated with the rental vehicle exceeds the allotted coverage, the additional amount becomes an out-of-pocket expense to you. This means that you need to know the amount of coverage under your policy before selecting a rental vehicle.

Decide if you want rental car coverage as part of your auto insurance quote. In case of a collision or comprehensive loss, you may be relieved that a rental car is available during the time it takes to repair or replace your car.