Who Pays For My Rental Car After an Accident?
If the other driver is responsible for causing the car accident, then the liability portion of their car insurance policy should cover the cost of a rental car if your vehicle is too damaged to drive. However, it is not guaranteed and some states do not have laws requiring insurance companies to cover the cost of a rental vehicle. If you are the at-fault driver, then your auto insurer will cover the cost of a rental car if you have rental reimbursement coverage. Otherwise, rental car costs will be paid out of pocket.
Who Pays for My Rental Car When Another Driver Is at Fault?
If you are involved in a car accident and the other driver was at fault, then their insurance company should cover the cost of a rental car if your vehicle is too damaged to drive and you need transportation. Rental car expenses should be covered under the other driver’s liability portion of their auto policy.
Rental car reimbursement when you’re not at fault is typically retroactive if you need a rental car urgently. Typically, you will pay for the rental car yourself and you will get reimbursed later if the claim is decided in your favor. If you have rental car reimbursement coverage, then your car insurance company will cover the rental car costs and seek reimbursement from the at-fault driver’s insurer.
If the at-fault driver was uninsured, then you will likely not receive any reimbursement for rental car costs unless you have rental car reimbursement coverage. You can attempt to sue the at-fault driver to recover the costs, but the legal costs can be significant and the other driver may not have the funds if they were unable to afford car insurance to start with.
How Does an Insurance Company Determine How Long You Get a Rental?
The number of days the insurance company will cover rental car expenses depends on the severity of your vehicle damage and the state you live in.
In Illinois, for example, the insurance company must cover the length of time it would take to repair your vehicle. If you get a quote from an auto shop for five days, then that is how many days should be covered by the at-fault driver’s insurance company. Keep in mind that you may be required to have your car repairs done at an approved auto repair facility.
The type of rental car the insurance company covers will typically be a comparable vehicle but it may not always be the same make and model as your damaged vehicle. If you drive a luxury car, for example, then the rental car may be a non-luxury brand that will function as temporary transport until your vehicle is drivable.
How Long Will Insurance Pay for Rental Car After Total Loss?
If your car is completely totaled and the other driver was at fault, then their insurance company should cover the vehicle’s fair market value but may not always pay for a rental car. In Louisiana, for example, auto insurers are encouraged to cover rental car costs “as a courtesy for a short period of time” but there is no legal mandate to do so.
Will I Have To Pay For My Own Rental Car if I’m Responsible for an Accident?
You will be responsible for rental car costs if you are the at-fault driver in a car accident unless you have rental reimbursement coverage in your auto insurance policy. Rental reimbursement is an optional coverage that will pay for the cost of a rental vehicle while your car is undergoing repairs from a covered loss.
Rental reimbursement coverage will pay for rental car costs up to the policy coverage limits, which can include a daily and per claim limit. For example, say you have a $30 daily limit and $800 claim limit. That means you will be reimbursed for up to $30 per day until you hit the $800 total cap, or about 26 days. You will be responsible for rental car costs once the limits are exhausted — most repairs should be completed by this point, though.
How To Get a Rental Car From an Insurance Claim
If the other driver was responsible for causing an accident, you can file a car insurance claim with their insurance company to have them cover the costs of a rental car.
Lengthy claims processes, however, can make it challenging to get compensation quickly. This can be an issue if you rely heavily on your car. In these cases, you will likely need to pay for the rental car out-of-pocket and then get reimbursed later once the claims process is complete. If you have rental car reimbursement in your auto policy, then your auto insurer should cover the cost of a rental car and they will seek reimbursement from the at-fault driver’s insurance company.
If you’re the at-fault driver, your own auto insurance company will cover a car rental if you have rental car reimbursement. Otherwise, you would need to pay for a rental car out of pocket.
What To Do if Fault Is Disputed After an Accident
If you’re unable to dispute a claim denial or negotiate a more favorable settlement with the other driver’s insurance company, you can consider involving an outside party. Below are some options to consider if the other insurance company disputes fault:
- File a complaint with your state’s insurance commissioner: Many insurance state commissioners allow consumers to file complaints against insurance providers online. Once the complaint is filed, the target insurance company must reply within a deadline, sometimes amending the claims decision in your favor.
- Hire a public claims adjuster: A public claims adjuster is an independent adjuster that is not affiliated with your or the at-fault driver’s insurance company and can attempt to secure a favorable settlement for your insurance claim. The adjuster will typically charge a fee of up to 15% or more of your settlement.
- Consult an attorney: You may want to hire an attorney to sue the at-fault driver’s insurance company and hopefully have a judge rule that you be reimbursed for rental car costs. Be sure to weigh the legal expenses against rental car costs — you may be paying more by taking the legal route.
Keep in mind that liability in an accident is not always all or nothing. In some states, both drivers can be responsible for causing the accident and the resulting costs will be shared based on the apportionment of liability. For example, Driver A was assigned 40% liability for speeding and Driver B was assigned 60% liability for running a red light. If Driver B were to cover Driver A’s rental car costs, then only 60% of the costs would be covered.
Even if you were partly liable for the accident and the claim settlement was unfavorable, you may still want to negotiate to lower your liability, so the other insurance company covers more of the car rental costs.
States With No-Fault Laws
Drivers in states with no-fault laws are responsible for their own losses, regardless of who caused the accident. Even if the other driver is responsible for the car accident, your vehicle damages, medical expenses and other costs will be covered by your own insurance provider. In other words, rental cars in no-fault states will generally be covered by your insurance company and only if you have rental car reimbursement.
Is Rental Car Reimbursement Coverage Worth It?
If you want to be prepared if an accident renders your car undrivable for a few days, then rental reimbursement coverage is worth considering. The cost of rental car coverage can sometimes outweigh the daily fee if you were to pay out-of-pocket. Purchasing a lower daily rental reimbursement limit can help lower the cost of rental reimbursement coverage. This can help guarantee personal transportation for a few days while you arrange for other means, such as carpooling with a coworker or having a family member drive you around.
You may be required to purchase additional coverages, like collision, before you can qualify for rental reimbursement coverage. Therefore, you should also consider this additional cost and whether your car’s fair market value is worth the additional coverages.
Need Rental Car Reimbursement Coverage?
Auto insurance may cover some of the costs incurred from a car accident you caused, but not a rental car. Even if the other driver was at-fault, you will likely need to pay out-of-pocket and get reimbursed after the claims investigation is completed. Rental car reimbursement coverage can help reduce your out-of-pocket costs while ensuring you have personal transportation while your car is in the repair shop.
Let SmartFinancial help you find an affordable auto policy that includes rental car reimbursement coverage. Just enter your zip code below and complete a quick questionnaire or call 855.214.2291 to receive your car insurance quotes.
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