If my car breaks down, will insurance cover a rental?

Car insurance will not cover a rental after your car breaks down unless you carry rental reimbursement or mechanical breakdown insurance (MBI). If your vehicle is damaged in a collision and breaks down, your rental would be covered if you carry rental reimbursement. If your vehicle breaks down due to mechanical failure, your rental may be covered if you carry MBI with certain companies. Before your car breaks down, buy insurance to cover a rental from companies with MBI.

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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: May 10, 2022

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What You Should Know

  • If your car breaks down, insurance will cover a rental if the claim is included as a “covered loss” in your policy
  • If your car breaks down due to mechnical failure, your insurance will not cover a rental car
  • Drivers can buy mechanical breakdown insurance or rental reimbursement to have insurance pay for a rental car after a breakdown

If my car breaks down, will insurance cover a rental? This is a frequently asked auto insurance question and, unfortunately, the answer is no. Insurance companies will not typically pay for a rental when your car breaks down. 

However, with rental reimbursement coverage, the insurance company may pay you back for your rental costs if your breakdown results from a collision or accident. Otherwise, an extended warranty can usually apply when a car breaks down due to mechanical failure, but it won’t always cover a rental.

Reading over your policy and understanding auto insurance coverages will help you determine when a rental is covered. Keep reading our guide to learn when insurance will pay for a rental car and who is responsible if a rental car breaks down.

If your car breaks down, and you need affordable insurance to cover a rental, enter your ZIP code above to find affordable auto insurance companies in your area.

If my car breaks down, will insurance cover a rental?

Insurance companies will only cover a rental if your car breaks down due to a collision or accident. Even then, you need to carry a rental reimbursement add-on to have your company cover a rental.

If your vehicle breaks down due to mechanical failure, insurance will not cover a rental car.

Auto insurance exists to protect drivers from the unpredictable, not maintenance failures. Insurance companies view vehicular maintenance as the driver’s responsibility, and rental cars for mechanical breakdowns are not covered.

When does auto insurance cover rental costs?

If you have rental reimbursement coverage, then insurance will pay for a rental car during repairs. However, be aware that this coverage does not apply to mechanical breakdowns. 

For insurance companies to cover any breakdown, it has to be included as part of a “covered loss” in your policy. Covered losses typically include structural damages sustained during a collision. So, if your breakdown is a direct result of a covered loss, then insurance will cover your rental costs. 

Your insurance may also cover rental costs if your vehicle is declared a total loss after an accident. How long will insurance pay for a rental car after total loss? That depends on your policy and rental reimbursement coverage. On average, insurance companies can pay up to 30 days.

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If my car breaks down, will insurance cover it?

What your insurance policy covers depends on the insurance company you choose and the kind of coverages you’re paying for. Typically, auto insurance does not cover anything when a vehicle breaks down due to mechanical issues.

That being said, a few insurance companies provide mechanical breakdown insurance (MBI). This type of additional coverage applies to major failures, including engine and battery failures, that can lead to breakdowns. 

MBI will not cover routine oil changes or tire rotations, though, so many drivers use this coverage for older vehicles with rare parts that cost more to repair.

Is mechanical breakdown insurance worth it? MBI can cost an additional $30-$100 per month and comes with higher deductibles, sometimes reaching $500 or more, which can make the policy superfluous, especially if you have an extended warranty.

Which insurance companies will cover me when my car breaks down?

No insurance company offers policies that pay for routine maintenance or mechanical breakdowns. However, a few provide MBI coverage to lower rates and repair costs for older vehicles after a breakdown.

The most popular auto insurance companies for mechanical breakdown insurance are:

  • AAA
  • Allstate
  • American Family
  • GEICO
  • Mercury

Each company offers different features with their policies, as well as deductibles. While some offer free towing or rental cars, others provide lower deductibles or roadside assistance. Let’s take a closer look at each company to see which offers the best coverage:

AAA Mechanical Breakdown Insurance

AAA Mechanical Breakdown Insurance provides roadside assistance and financial relief for costly maintenance repairs, but it does not cover rental cars after a breakdown. 

There are no deductibles at AAA-owned repair shops. At AAA-approved mechanics, the deductible is $50. 

However, you must be a AAA member to buy AAA auto insurance. AAA membership packages range from $59-$119 per year.

Allstate Extended Care

Allstate Extended Care also comes with a cheap $50 deductible and covers the powertrain, core systems, and technology in your vehicle. It also gives drivers the luxury of choosing their own mechanic. 

Allstate will also cover a rental car after a breakdown for up to $40 per day for 7 days and up to $100,000 of towing costs after a breakdown. However, Extended Care is limited and only applies for 7 years or 100,000 miles.

American Family ForeverCar

An American Family ForeverCar subscription will cover a rental car after a breakdown for up to $40 per day. Coverage also applies to up to 225,000 miles and includes a wide array of mechanical and powertrain repairs.

Drivers can choose their own mechanic and their own level of coverage, with additional platinum and powertrain coverage levels for extra protection.

GEICO Mechanical Breakdown Insurance

Does GEICO cover a rental car if my car breaks down? No. GEICO MBI policies only cover repairs to mechanical parts of your car, but it will cover all those mechanical parts. Unfortunately, GEICO has the highest MBI deductible on this list at $250.

You will also need rental reimbursement for GEICO rental car insurance to apply during an MBI claim. 

Mercury Mechanical Protection

Mercury Mechanical Protection offers some of the most extensive breakdown coverage, including rental coverage, roadside assistance, and trip interruption coverage. Drivers can also choose their own mechanic no matter what state they are in.

How much will it cost for insurance to cover a rental if my car breaks down?

If your car breaks down, and you want insurance to cover a rental car, you’ll need to pay extra for rental reimbursement coverage, MBI, or both. 

The average mechanical breakdown insurance rates average around $100 per year. On the other hand, rental reimbursement averages around $60 per year.

The difference is only a couple dollars per month, which could end up saving you in repair costs if you drive an older vehicle. To decide which type of insurance coverage fits your budget, shop around with auto insurance quotes from multiple companies to get the best rates. 

Out of the companies above, Allstate and American Family offer the most affordable rental car insurance after your car breaks down. GEICO rental car rates will likely be higher since drivers must carry both rental reimbursement and mechanical breakdown insurance for coverage. However, if you have other GEICO insurance, rental rates might be cheaper with a bundling discount. 

Before your car breaks down, buy insurance to cover a rental. Enter your ZIP code below to find affordable auto insurance quotes from companies in your area.

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Frequently Asked Questions About Rental Car Insurance

To learn more about when insurance will cover a rental car, read the answers to the FAQs below:

#1 – Does insurance give you a rental car if your car breaks down?

No. Your insurance company will not automatically give you a rental car when your car breaks down, or even in an accident. With most auto insurance policies, rental costs are reimbursed to a driver after their claim is filed.

If you need a rental car for any reason, those costs will be paid out of pocket and paid back to you once your insurance company finishes processing your claim.

#2 – Who is responsible if a rental car breaks down?

If a rental car breaks down due to mechanical failure, then the rental company is usually responsible. However, if a mechanical breakdown is caused by the driver’s negligence, the driver will be responsible for repair costs and damages.

When you’re involved in an accident while driving a rental, you will need to ensure your auto insurance policy covers rentals. If not, then purchase additional liability coverage from the rental company. You can also check to see if the credit card you use to rent the vehicle offers liability coverage.

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