What is Car Rental Insurance?

Car rental insurance should not be confused with rental car insurance. The two sound very familiar, but they will help you out in a different way. Car rental insurance covers the cost required to rent a car while yours is in the shop. Rental car insurance is typically purchased through the rental company and covers damage to the rental car while you are using it. While rental car insurance is purchased on a per-occurrence basis, you should carry car rental insurance as part of your standard auto coverage.

Car Rental Insurance Basics

Whenever you take your car into the shop for an extended period of time, your car rental insurance should cover the cost to get a replacement. This should be the case even if you are at fault in the accident. Your insurance company will usually have a list of favored rental companies for you. In some cases, your insurance company may even assist you in getting to the rental facility if your car is un-drivable. 

Car rental insurance is not a standard election on every auto insurance plan. Rather, you should make sure you are covered for this need. This is especially true if you are using a budget plan that may omit these types of items to save you money. If you are willing to cover the cost to rent a replacement vehicle yourself, you do not need to pay for the insurance coverage.

Car Rental Insurance Limits

Your insurance will only cover a rental for a limited time, for a specific type of car, and for a price limitation. If you exceed these limitations, you will need to begin paying out of pocket for the car. One way to avoid this is to make sure you know your limits before you take your car into a shop. Tell these limits to your repair company. The company may be able to expedite the repair of your vehicle to ensure you are within your insured time period for a rental car. Most auto body shops are willing to do this for you. If you need a specific type of vehicle, for example a truck, in order to perform your daily needs, you should make sure this is covered in your insurance agreement.

Making a Claim for Car Rental Needs

Your insurance company will handle the claims process in one of two ways. First, the insurance company will refer you to an auto body shop and a car rental company when you report your accident. You will use these services because the insurance company has worked out a deal with them to reduce both its cost and your cost.

Or, the rental company will have you pursue your own arrangements, then file the claim later. When you call to report your accident, which you should do immediately, your insurance company should tell you which method is going to be required. The main advantage of the referral is the claims handling process is easier. When you go your own way, you will have more flexibility, but you will have to file more paperwork to make sure you are reimbursed.

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