TL;DR: Rental car reimbursement and towing coverage are optional auto insurance add-ons that help cover the costs of a rental car and towing services when your vehicle is undrivable due to an accident or breakdown. While car accidents and breakdowns are unfortunate, rental car reimbursement and towing coverage can help you handle the costs associated with them. These optional add-ons ensure you have access to a rental car when your vehicle is being repaired and provide towing services if your car breaks down or gets into an accident.
These coverages can save you from hefty out-of-pocket expenses. Call Insure on the Spot at 773-202-5060 to learn more or get these coverages added to your policy.
What is Rental Car Reimbursement Coverage?
Rental car reimbursement coverage is an optional add-on that helps pay for a rental car if your vehicle is undrivable due to a covered insurance claim. This could include accidents, theft, vandalism, or other incidents covered by your collision or comprehensive insurance. The coverage is designed to keep you mobile while your car is in the shop for repairs.
- How it works: After a qualifying incident, you can arrange for a rental car. Your insurer may work with rental agencies to directly bill them, or you might need to pay upfront and submit receipts for reimbursement. Rental reimbursement typically has a daily limit (e.g., $30–$50 per day) and a maximum number of days (e.g., 30 days). For example, if you rent a car for $60 per day and your policy covers $40 per day, you would pay $20 out-of-pocket.
- What’s covered: The coverage pays for a rental car during repairs for accidents, theft, or vandalism. It doesn’t apply for non-claim situations like routine maintenance or mechanical failures.
- Requirements: Rental reimbursement is typically available only with collision and comprehensive coverage. These coverages must be in place before you can add rental reimbursement to your policy.
What is Towing Reimbursement Coverage (Towing and Labor Insurance)?
Towing reimbursement coverage, often called “towing and labor” or roadside assistance coverage, helps cover the cost of towing your vehicle after an accident or breakdown. Unlike rental reimbursement, towing coverage is more flexible and can be used for breakdowns as well as accidents.
- How it works: If your car can’t be driven due to a breakdown, flat tire, or crash, towing coverage helps pay for towing services. Coverage typically comes with a dollar limit per incident (e.g., $50–$75) or a mileage limit (e.g., 15 miles). For example, if your tow costs $120 and your policy covers $75, you would pay the remaining $45.
- What’s covered: Towing coverage applies to both accident-related tows and non-accident breakdowns (e.g., a dead battery or flat tire). Some policies also include additional services like battery jump-starts, flat tire changes, and lockout assistance.
- When to use it: You can use this coverage whenever your car is undrivable and needs to be towed, whether due to a collision, mechanical failure, or other roadside issues.
When Do These Coverages Apply and How Do I Use Them?
Rental Reimbursement Coverage
- When it applies: Rental car reimbursement applies after a covered incident (e.g., a car accident, theft, or vandalism). It does not apply to routine maintenance or mechanical breakdowns.
- How to use it: After your accident, let your insurer know you need a rental car. Many insurers work with rental companies to direct-bill, or you may need to pay upfront and submit receipts for reimbursement.
Towing Coverage
- When it applies: Towing coverage can be used for any situation where your car is undrivable, including accidents and breakdowns. This coverage is flexible and applies in both insured and non-insured cases.
- How to use it: Call your insurer’s roadside assistance number (if provided) or arrange a tow yourself. If you use a third-party service, you’ll pay the tow bill upfront and submit the receipt for reimbursement.
How Much Do Rental Reimbursement and Towing Coverages Cost?
These coverages are affordable add-ons to your policy:
- Rental Reimbursement: Typically costs around $60–$80 per year for mid-level coverage. For just a few dollars per month, you can ensure you’re not left without a vehicle after an accident.
- Towing Coverage: Towing coverage generally costs $10–$30 per year depending on the coverage limits. Given that a single tow can easily cost over $100, this is an inexpensive option for peace of mind.
Are Rental Car and Towing Reimbursement Coverages Worth It?
Whether or not these coverages are worth it depends on your driving habits and personal needs:
- Rental Reimbursement (Worth it if…): If you rely on your car daily and don’t have an alternative vehicle, rental coverage can be incredibly valuable. It ensures that you have a vehicle while yours is being repaired. It’s especially worthwhile if you can’t afford a rental car out-of-pocket or prefer not to use a credit card for upfront charges.
- Towing Coverage (Worth it if…): For most drivers, towing coverage is highly recommended because of its low cost compared to the potential cost of a tow. If your car breaks down on the road, having towing coverage ensures that you don’t have to pay out-of-pocket for expensive tow bills.
Frequently Asked Questions (FAQ)
Q: Will my insurance cover a rental car while my car is in the shop for repairs?
A: Yes, if you have rental reimbursement coverage and the reason your car is in the shop is due to a covered incident (e.g., an accident). It won’t cover rentals for non-claim situations like routine maintenance.
Q: Does rental reimbursement insurance cover breakdowns or mechanical issues?
A: No, rental reimbursement only applies when your vehicle is out of service due to a covered loss (e.g., an accident). It does not cover mechanical breakdowns.
Q: What about towing insurance – does it cover me if my car breaks down?
A: Yes, towing insurance covers you for breakdowns as well as accidents. It’s designed for any situation where your car can’t be driven and needs a tow.
Q: Is “towing and labor” coverage the same as roadside assistance?
A: Yes, towing and labor coverage is essentially roadside assistance. It covers towing and minor roadside fixes like jump-starts and tire changes.
Q: Do I need to have collision and comprehensive insurance to get rental reimbursement?
A: Yes, most insurers require you to have collision and comprehensive coverage before you can add rental reimbursement to your policy.
Q: If the other driver was at fault in an accident, will their insurance pay for my rental car?
A: Often yes, but it can take time for the other driver’s insurer to approve the rental. Having your own rental reimbursement coverage allows you to get a rental car immediately and let your insurer handle reimbursement.
Q: Can I add rental reimbursement coverage after an accident has occurred?
A: No, you must have rental reimbursement coverage before an accident occurs. Insurance coverage is not retroactive.
Q: How do I know if I already have rental or towing coverage on my policy?
A: Check your policy’s declarations page or your latest insurance bill. You can also call your insurance agent to confirm whether you have rental reimbursement or towing coverage.
Get a Quote Today!
For more information or to add rental reimbursement or towing coverage to your policy, call Insure on the Spot at 773-202-5060. We can help you find affordable coverage options to ensure you’re prepared for any unexpected car troubles.