There’s really only one main reason to buy rental reimbursement insurance, but it’s a good one: Having this type of coverage can save you a lot of money.

What is Rental Reimbursement Insurance?

Rental reimbursement coverage pays if you need to rent a car after your vehicle is in a car accident. If your car is not drivable, your rental car coverage usually begins right away. Otherwise, your coverage period typically won’t begin until your car is a repair shop.

If your car is an accident and suffers damage, it can take a while to complete the repairs – sometimes even weeks. During that time, you’ll need transportation. While some people can get by using public transportation or sharing car rides with others during this time, many can’t do so. And, even if you can, changing your routine can be a hassle.

So, many individuals have turn to a rental car as their best option.

Of course, rental car costs can mount quickly, particularly if you’ll need the rental for more than a couple of days. That’s where rental reimbursement insurance saves your wallet. It will pay for a rental car. Typical rental car coverages provide you with $25-$30 per day of coverage; you'll pay for anything in excess of that. Many car insurance providers place a limit on the amount of coverage you can use per accident, but it's usually a generous amount.

Let’s do some math. If your rental car costs $30 and you have the car for 14 days, that means having this protection saves you $420. And, it can take a bit of the frustration out of being in the accident.

What Rental Reimbursement Insurance Doesn’t Cover

Don’t make the mistake of thinking you can use rental reimbursement insurance every time your car is the repair shop; it’s only good for car accidents covered in your comprehensive or collision coverage.

So, for example, you can’t use this coverage to get a rental car after you’ve dropped your car off for the day at the repair shop for routine brake work. And, you can’t use it to impress a date by getting an upscale rental car for the night.

Also, rental reimbursement coverage is the not the same as the rental car insurance you might purchase from a rent-a-car agency. That type of coverage protects you if you damage the rental car – it doesn’t pay for the cost of the rental car. (Your regular car insurance policy usually makes it unnecessary to purchase rental car insurance.)

Is Rental Reimbursement Insurance Expensive?

No, it isn’t – at least relatively speaking. That’s another valid reason to consider adding this to your auto insurance policy. After all, you never know when you might be in a serious auto accident and without your car for a while.