Rental car reimbursement and towing coverage are optional add-ons that pay for a rental car and towing services when your vehicle is undrivable due to an accident or breakdown. These coverages save you from paying hundreds out-of-pocket when your car’s in the shop or stranded on the side of the road. Call Insure on the Spot at 773-202-5060 to add these to your policy.
What is Rental Car Reimbursement Coverage?
Rental car reimbursement is an optional add-on that pays for a rental car if your vehicle is undrivable due to a covered insurance claim. This includes accidents, theft, vandalism, or other incidents covered by your collision or comprehensive insurance. It keeps you mobile while your car’s being repaired.
Here’s how it works: After a qualifying incident, you rent a car and your insurer either bills the rental agency directly or you pay upfront and submit receipts for reimbursement. The coverage has a daily limit (typically $30-$50 per day) and a maximum number of days (usually 30 days). If you rent a car for $60/day and your policy covers $40/day, you’d pay $20 out-of-pocket.
One important requirement: rental reimbursement is typically only available if you have both collision and comprehensive coverage on your policy. You can’t add this coverage if you only carry liability insurance. Understanding the difference between collision and comprehensive car insurance in Chicago helps you see why both are needed for rental reimbursement to apply.
What Rental Reimbursement Covers (and What It Does NOT)
Rental reimbursement sounds straightforward until you actually need it. Here’s exactly what triggers this coverage and what doesn’t.
What rental reimbursement DOES cover:
- Accident repairs: If you’re in a collision and your car needs body work, rental reimbursement kicks in while it’s being fixed. This applies whether you were at fault (covered by collision) or not at fault (but you’re using your own insurance).
- Theft: If your car gets stolen, rental reimbursement covers a rental while the police search for it or while your insurer processes the total loss claim. This typically maxes out at 30 days.
- Vandalism and weather damage: Comprehensive claims like vandalism, hail damage, or flood damage qualify. If your car needs repairs from these incidents, you can rent a car and get reimbursed.
- Hit-and-run damage: If someone hits your parked car and drives off, your collision coverage handles the repairs and rental reimbursement covers your rental.
- Glass claims (sometimes): Some policies include rental reimbursement even for windshield replacement if the repair shop needs your car for a day or more.
What rental reimbursement DOES NOT cover:
- Mechanical breakdowns: This is the big one. If your transmission fails, your engine overheats, or any other mechanical problem happens, rental reimbursement doesn’t apply. It only covers insurance claims, not maintenance issues.
- Routine maintenance: Getting your oil changed, brakes replaced, or tires rotated? You’re on your own for a rental. Rental reimbursement doesn’t cover scheduled service.
- Recalls: If your car needs recall work and the dealer needs to keep it overnight, rental reimbursement won’t pay for that rental.
- Pre-existing damage repairs: If you’re finally fixing that dent from six months ago, rental reimbursement doesn’t apply since it wasn’t a recent covered claim.
- Rental costs beyond your policy limits: If your policy pays $30/day and you rent a luxury car for $100/day, you’re paying the $70 difference yourself.
- Rentals that start before claim approval: If you rent a car immediately after an accident but before your insurer approves the claim, you might not get reimbursed for those first few days.
The key thing to remember: rental reimbursement only works when you file a collision or comprehensive claim. No claim filed means no rental coverage, even if your car’s undrivable. That’s why some people pair rental reimbursement with mechanical breakdown coverage or an extended warranty to cover non-accident situations.
Want rental + towing coverage included? Get a quote and compare endorsement options in minutes. Call 773-202-5060 or get your free quote online now.
What is Towing Reimbursement Coverage (Towing and Labor Insurance)?
Towing reimbursement, often called “towing and labor” or roadside assistance, covers the cost of towing your vehicle after an accident or breakdown. Unlike rental reimbursement, this coverage is way more flexible—it works for breakdowns and accidents.
Here’s how it works: If your car can’t be driven due to a breakdown, flat tire, or crash, towing coverage pays for towing services. Coverage typically has a dollar limit per incident ($50-$75) or a mileage limit (like 15 miles). If your tow costs $120 and your policy covers $75, you’d pay the remaining $45. Some policies also include jump-starts, flat tire changes, and lockout help.
What Towing & Labor Covers (and What You Still Pay For)
Towing coverage is more generous than rental reimbursement, but it still has boundaries. Here’s what you can actually use it for.
What towing & labor DOES cover:
- Accident tows: If you’re in a crash and your car needs to be towed to a repair shop or impound lot, towing coverage handles it up to your policy limit.
- Breakdown tows: Dead battery, overheated engine, blown tire, transmission failure—if your car won’t move, towing coverage gets it to a shop. This is the big advantage over rental reimbursement.
- Flat tire changes: Most policies include labor to change your flat tire on the spot if you have a spare. If you don’t have a spare, they’ll tow you to a shop.
- Jump-starts: Battery died in a parking lot? Towing coverage typically includes someone coming out to jump your car.
- Lockout service: Locked your keys in the car? Many towing policies cover a locksmith coming to open it (up to a dollar limit).
- Fuel delivery: Ran out of gas? Some policies will bring you a gallon or two to get you to a station.
- Winching: If you slide off the road into a ditch or get stuck in snow, winching service is often included up to your policy limit.
What towing & labor DOES NOT cover (what you still pay for):
- Tows beyond your dollar or mileage limit: If your policy covers $75 and the tow costs $150, you pay the extra $75. If your policy covers 15 miles and you need a 30-mile tow, you’ll pay for those extra 15 miles.
- Long-distance tows home: If you break down 200 miles from home, towing coverage will get you to the nearest shop, not all the way home. That long tow is on you unless you have special long-distance towing coverage.
- Tows for non-emergency reasons: Want to tow your project car from your garage to a shop? That’s not covered. This is for emergency roadside situations only.
- Impound or storage fees: Towing coverage gets your car to the lot, but daily impound storage fees aren’t covered by this endorsement.
- Parts and actual repairs: Towing coverage pays for labor to change your tire or jump your battery, but if you need a new battery or new tire, you buy those yourself.
- Tows you arrange before calling your insurer: Some policies require you to call their roadside assistance number first. If you call a random tow truck yourself, they might not reimburse you (or they’ll reimburse only up to their contracted rate).
One thing to know: towing coverage and emergency roadside assistance are essentially the same thing, just different names. Some insurers call it “towing and labor,” others call it “roadside assistance.” Check your policy to see what’s included—some are more generous with services like lockouts and fuel delivery than others.
When Do These Coverages Apply and How Do I Use Them?
Rental Reimbursement: This applies after a covered incident like an accident, theft, or vandalism. It doesn’t work for breakdowns or routine maintenance. To use it, let your insurer know you need a rental car. They’ll either work with rental companies to direct-bill or you’ll pay upfront and submit receipts for reimbursement.
Towing Coverage: This works for any situation where your car is undrivable—accidents, breakdowns, flat tires, you name it. To use it, call your insurer’s roadside assistance number (usually on your insurance card) or arrange a tow yourself. If you use a third-party service, you’ll pay the bill upfront and submit the receipt for reimbursement.
How Much Do Rental Reimbursement and Towing Coverages Cost?
These are cheap add-ons: Rental reimbursement typically costs $60-$80 per year for mid-level coverage (about $5-$7/month). Towing coverage runs $10-$30 per year depending on limits. Given that a single tow can easily hit $100-$200, towing coverage pays for itself the first time you use it.
Are Rental Car and Towing Reimbursement Coverages Worth It?
Rental reimbursement is worth it if: You rely on your car daily and don’t have access to another vehicle. It’s especially valuable if you can’t afford to rent a car out-of-pocket or don’t want to front the money on your credit card. For $5-7/month, it’s a no-brainer if you’d be stranded without a car.
Towing coverage is worth it for: Pretty much everyone. At $1-3/month, it costs less than a single tow. If your car breaks down even once in three years, the coverage has paid for itself. Most people should have this. Understanding what full coverage car insurance in Chicago typically includes helps you decide which optional add-ons make sense for your situation.
Frequently Asked Questions
Does rental reimbursement cover a rental if my car breaks down?
No. Rental reimbursement only applies when your car is undrivable due to a covered insurance claim (accidents, theft, vandalism). Mechanical breakdowns don’t qualify unless you have separate mechanical breakdown coverage or an extended warranty.
Is rental car reimbursement worth it?
Yes, if you depend on your car daily and can’t easily afford a rental out-of-pocket. At $60-$80/year, it’s cheap peace of mind that ensures you stay mobile while your car’s being repaired after a covered incident.
Do I need roadside assistance if I have towing coverage?
Towing coverage and roadside assistance are the same thing. If your policy includes “towing and labor” or “roadside assistance,” you’re covered for tows, jump-starts, flat tire changes, and sometimes lockout service.
Will my insurance cover a rental car while my car is in the shop for repairs?
Only if you have rental reimbursement coverage and the repairs are due to a covered claim like an accident. It won’t cover rentals for routine maintenance or mechanical breakdowns.
Does rental reimbursement insurance cover breakdowns or mechanical issues?
No. Rental reimbursement only applies to covered losses like accidents, not mechanical failures.
What about towing insurance – does it cover me if my car breaks down?
Yes. Towing coverage works for breakdowns and accidents—any situation where your car can’t be driven.
Is “towing and labor” coverage the same as roadside assistance?
Yes. They’re just different names for the same coverage that includes towing, jump-starts, flat tire changes, and sometimes lockout service.
Do I need to have collision and comprehensive insurance to get rental reimbursement?
Yes. Most insurers require both collision and comprehensive coverage before you can add rental reimbursement to your policy.
If the other driver was at fault in an accident, will their insurance pay for my rental car?
Often yes, but it can take days for the other driver’s insurer to approve it. Having your own rental reimbursement lets you get a rental immediately without waiting.
Can I add rental reimbursement coverage after an accident has occurred?
No. You must have it before the accident. Insurance coverage isn’t retroactive.
How do I know if I already have rental or towing coverage on my policy?
Check your policy’s declarations page or insurance bill. You can also call your agent to confirm.
Get a Quote Today
To add rental reimbursement or towing coverage to your policy, call Insure on the Spot at 773-202-5060. We’ll help you find affordable coverage options so you’re prepared for unexpected car troubles. Get covered today and drive with confidence.