Who pays for the rental car while my car is in the repair shop?

Auto insurance covers a rental car during repairs if you have rental reimbursement coverage. Check your car insurance policy to see what's covered, and consider upgrading your personal auto insurance to cover rental cars during repairs.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 6, 2022

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If you were involved in an accident that was your fault, then your insurance company should step in to pay for the damage that you caused in the collision, as well as to pay for any damage to your car and the repairs that need to be carried out.

Other than having the best roadside service, this is what personal auto insurance is for. This is the reason that it’s so important to take out insurance. As a driver, you are in charge of an incredibly powerful piece of machinery that could feasibly cause a serious bodily injury or even a death.

By taking out insurance, you should that you are responsible for that vehicle and that you can pay for any damage you cause. Without this insurance, you could end up inflicting more damage than you could cover, and that in turn could leave the injured party with high costs to pick up and no one to help.

But there are other factors to consider after an accident too. Like the car repair estimate and the practical aspect of now being left without a car.  This then raises the question of who will pay for the rental car while your vehicle is undergoing repairs at the body shop.

And as is usually the case, the answer to this question depends on numerous factors.

Who covers rental vehicles?

Suppose you get into an accident and are left without a means of transportation while your car is in the shop. On the rare occasion that you find yourself at one of the body shops with rental cars, you’ll at least be a little lucky but you still  might ask yourself, “If my car breaks down, will insurance cover a rental?” If you have insurance that offers rental car reimbursement coverage, the answer is yes.

Some auto insurance providers offer a policy to make sure that you still have a means of getting around and thereby provide a rental car if the collision was considered a covered accident.

However, this isn’t always the case, and it will usually depend on the nature of your cover, which will be outlined in the fine print of your policy. If you’re unsure, then the best way to find out is to look at your policy and comb through it to see if there is mention of rental car coverage.

Most basic car insurance policies will not include car rental coverage in their price. However, many will offer it as an optional coverage addition if you need it, which will normally slightly increase your premiums.

Things to Consider

Other companies might offer to arrange for a hire car while yours is being repaired but won’t pay the car rental company. Or, in some cases, they might pay for the majority while requiring you to pay an excess just as you would do on your regular insurance coverage.

The other thing to consider is the nature of the car. Some insurance companies will offer a luxury vehicle, while others will offer a more basic model – perhaps with the option to pay for an upgrade should you decide you want it.

It’s also worth noting that this is an option that can be offered by roadside assistance insurers too. These of course are companies that will repair your car on the roadside or take it to the garage if you have a breakdown far from home. Again, whether or not you receive a rental car while yours is being repaired will depend on the nature of the auto insurance provider and the specific policy you opted to take out.

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Should you get a car rental included?

With that in mind, it’s up to you to decide if you want to get a car rental included in your insurance policy. The answer will very much depend on your current circumstances and on the cost of the hire car, as well as the features that come with that car.

This is why it’s always a good idea to use price comparison sites. This way, you can look at the rates offered by different auto insurance firms and then see how the quotes vary when you add a car rental or remove it.

If you decide that you can afford the car rental, you need to think about your current circumstances. For example, if you have two cars and you don’t often need one of them, then you can always use that secondary vehicle as your main vehicle when your car is in the body shop.

Failing that, some people might be able to cope well without a car rental simply thanks to their circumstances. Perhaps you live near to where you work and are fine to commute on foot, maybe you have a supermarket just down the road from you, perhaps you have a friend who would be able to provide lifts – or even provide you with a car for free.

Consider how much it would cost to rent a car from a car rental agency for a few days or even weeks. Compare this price to the additional cost of the car rental on top of your auto insurance policy, and then decide whether it’s a good value proposition.

Conclusions and Caveats About Rental Car Reimbursement

Ultimately, every car insurance company is different, and whether or not you get a rental car included in the price will be at their discretion. In many cases, though, you’ll have the option to choose yourself if you want to add the car to your personal auto policy or leave it.

Note that there are also some interesting caveats and exceptional circumstances. For example, if you left your car in the auto body shop and it takes a lot longer than anticipated, you might be entitled to a vehicle from the auto body shop itself. Take a look at the website and you’ll find that many offers to ‘help’ with a rental car as part of the concierge service. Of course, this is a phrasing that is intentionally open to interpretation but it is worth inquiring about.

And of course when you are not the at-fault party in the accident, then you might be entitled to compensation from the other party. However, you will normally be responsible for arranging and funding the car rental until the dispute has been settled and it is agreed that you were not the blame.

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