Why Should I Have Rental Car Reimbursement Coverage?

Planning to hit the open road this summer? You’re in good company. About 67% of Americans say they’ll take a road trip this summer.

But picture this: You load up the car, fill up the gas tank, and hit the road, only to have your car totaled in an accident. What a nightmare!

To make matters worse, now you have to rent a car—and rental cars don’t come cheap these days.

There’s still shortage of rental cars, with agencies struggling to restock their inventory amid supply chain issues. These inventory constraints are driving up prices: average costs to rent a vehicle for a week run from $480 on the low end to $695 on the high end.  

The good news? You don’t have to eat the costs of renting a car if your insurance policy has rental car reimbursement coverage.

What is rental car reimbursement coverage? Also called “alternate transportation coverage” or “temporary transportation coverage,” rental car reimbursement coverage is exactly like it sounds: Your insurance provider foots the bill for transportation expenses, such as a rental car or public transit fares, while your vehicle is being repaired after a covered insurance claim, such as a crash. To be clear, rental reimbursement coverage does not kick in if your car requires routine maintenance.

Why do I need it? As we highlighted above, renting a car can be costly, especially in today’s low-inventory market. Having rental car reimbursement coverage means you’ll have one less expense if your car is undrivable after a covered claim.

Are there coverage limits? Yes. Selectable coverage limits vary; some companies offer relatively low reimbursement rates, with some offering as low as $25 a day. That’s not enough coverage in today’s rental market. And, with inflation recently hitting a 41-year high, $25 doesn’t go very far nowadays.

Pro tip: Rent a hybrid or EV. Most rental car reimbursement insurance policies allow you to select a rental car agency of your choice. But with a nationwide average of $3.44 for gas, renting a hybrid or an electric vehicle (EV) that’s fuel efficient can help you save money at the pump.

Why should I add rental reimbursement coverage to my Electric Insurance policy? We offer high reimbursement rates at reasonably priced premiums. Our Premier Choice Auto and Signature Choice Auto policies cover you for up to $125 in rental costs per day. This coverage will add only about $25 to your annual policy premium.

Contact Us

Our Risk Coaches™ are standing by to help you add rental car reimbursement coverage to your insurance policy. They’re glad to help you navigate the often-perplexing world of insurance coverage. Contact your local Risk Coach professional or call us at 800.342.5342, Monday through Friday from 8:00 a.m. to 8:00 p.m. ET

Product, service, program, credit, and discount availability and limits vary by state. The information provided on this site is provided for informational purposes only and is not a full explanation of products, services, or coverage. For more information, please contact Electric Insurance Company at 800.227.2757. If there are discrepancies between the information on this site and the policy, the terms in the policy apply.

Electric Insurance Company Risk Coaches help you assess your current coverages and exposure to risk based on the information you provide during your discussion. The services provided are for informational purposes only and do not create a professional or fiduciary relationship. Incomplete information or a change in your circumstances after your meeting may affect coverage requirements or recommendations.